Uruguay, a key global wool exporter, faces a challenge with an unsold stockpile of 40 million kilograms of coarse wool, alarming its producers.
The Uruguayan Wool Secretariat (SUL) noted a 22% decline in wool exports in the first half of 2023.
Antonella Riani of the SUL attributes this drop to the US-China trade tensions and the COVID-19 pandemic’s aftermath, which hit China, the leading wool importer, reducing demand and prices, particularly for medium and coarse wools.
Since 2018, due to low prices, producers began storing wool, anticipating better rates.
The rise of affordable synthetic wool has further strained the natural wool market.
This issue isn’t unique to Uruguay; countries like Peru and New Zealand face similar challenges.
Yet, there’s a silver lining for Uruguay.
Its fine wool producers, predominantly in the north, have secured buyers at competitive prices.
Fine wool, ideal for high-end fashion due to its insulation and biodegradable properties, has considerable market potential.
Furthermore, Uruguay’s wool industry stands out for its diversified offerings, including washed and combed products, prioritizing quality over quantity.
In 2023, Italy and China were the top consumers of Uruguayan wool, accounting for 23% and 20% respectively.
Overall, wool exports totaled US$82 million, down 22% from 2022’s US$105 million.