Green shoots of consumer demand for Merino clothing are emerging in Asia.
Dave Maslen, NZ Merino’s manager of innovation and sustainability, said market growth especially in Asia, and expanding uses for fine wool worldwide, are prompting the release of new Merino wool contracts for fibre from 15.5 microns to 25.5 micron.
“It’s a very broad range but it signals growth in global customer production for specific markets,” he said.
That product mix reflects uses as diverse as hard-wearing tramping socks at the stronger end of the range, to super fine next-to-skin products.
“It acknowledges the Merino is a very versatile fibre from active outdoors to fashion to luxury with a suite of attributes that have multiple benefits and uses,” said Maslen.
The fibre’s growing reputation for versatility combined with its naturalness and NZ’s wool production story, is resonating with Asian customers, said Jan van Mossevelde, the global president of Icebreaker and Smartwool.
“The fibre speaks to the imagination. It’s performance and apparel, not just fashion,” said Van Mossevelde who has been in NZ.
“It makes people feel great and it has a wonderful story about where it comes from.”
Icebreaker, owned by VF Corporation, is the company’s fastest growing brand in China. It also owns The North Face, Vans and Timberland.
While markets are soft in North America and Europe, Van Mossevelde said Asia is becoming aware of the attributes of wool clothing and are seeking soft-feel garments made from natural fibres.
On the back of that growing Asian interest, NZ Merino is now offering three-year contracts for 15.5 micron wool.
This Asian interest was singled out by NZ Merino in last month’s market update when it forecast a net loss after tax for this year of between $3.2 and $4.3 million.
The forecast was predicated on deteriorating trading conditions due to low demand and high inventory, but demand in Asia was improving.
Maslen said Icebreaker and NZM have contracted $21m of wool for the 2024-25 season.
Japanese processor Nikke is also growing its interest in Merino wool, taking 4000 bales this season worth $7.5m, part of a three-year contract for 13.2 micron to 25.7 micron wool.
Maslen said gains are being made with NZ Merino’s crossbred wool contract business, with Rathi Woollens, India’s largest importer of carpet-grade raw sheep wool recently visiting.
Rathi uses 7000 tonnes a year but is increasing its purchasing of NZ wool, taking 1500 tonnes last year and seeking at least 2000 tonnes this year.
Van Mossevelde said the current market uncertainty shows the value of contracts in providing certainty for growers and protection when prices fall as they have.
But he is confident conditions will improve.
“We are confident growth is going to come back. It is a matter of how long it will be for that growth to come.”
