The five-year outlook on wool is looking positive, according to the Australian Bureau of Agricultural and Resource Economics (ABARE).
The bureau projected year-by-year average prices (per kilogram clean) would increase to an average 639 cents Australian in the year 2000-01. In year 2001-02 the price is expected to average 691 cents Australian and in year 2002-03 the price is expected to increase to an average of 724 cents Australian.
That compares to the average price of 583 cents per kilogram reported so far this season by the Australian Wool Exchange's Eastern Market Indicator.
"Cotton and wool prices are expected to rise over the next five years," Ms. Trish Gleeson, an ABARE senior industry analyst said at an Outlook 2000 conference. "Competition from synthetic fibers will remain strong and this will limit the extent of the recovery."
Optimism on increasing wool prices is based on growing demand for commodities as the world economy gathers strength, and lower wool production, according to Market News, a weekly world price guide produced by The Wool Record, based in England.