Figures from the Australian Eastern Market Indicator (EMI), the internationally recognised price-index reference for raw wool, show that the average price of raw wool has leapt by 37 per cent during the past two years.

Exchange rate variations mean that the 37 per cent Australian increase rises sharply to 65.5 per cent in Euros.

Australian wool growers consider that the price they are getting for their wool is still too low, but the European textile/apparel industries feel that pure wool is pricing itself into the luxury market and are increasingly using wool-based blends. European spinners are finding it difficult to pass on a 65 per cent price increase over two years.

There is a ray of hope for the European apparel industry however. The Euro has strengthened over the past two months and raw wool prices have decreased slightly.

By Marc Laroche