Demand for Japanese worsted yarn should experience a modest recovery during the first half of 2004, according to a statement from the Japanese Wool Spinners Association.

The product has been held back recently by high wool prices, increased competition from other fibres, continued weak domestic retail demand and declining worsted fabric demand from China.

Worsted wool knitting yarn was expected to be hardest hit in the latter half of 2003, while worsted weaving yarn demand was also expected to fall.

Over the past decade, Japanese worsted yarn production has dropped by about 70 per cent, while imports to the country, predominantly from China, have nearly tripled.