It is reported that Australian wool prices again rose in US$ terms this week, reflecting a much stronger demand in 2006.  

First,it appears that Chinese buyers anticipated lower prices after their May Day holidays.

Having waited for weeks for a softer tone in the market, they are now forced buying at higher prices, given the very low level in stocks at China's textile mills.

Second, the strength in global economic growth is giving a boost to retail sales and to demand for all micron ranges, as a result, including the medium micron wools.

Third, tight supply in Australia is supporting prices and the lack of fine wool will continue in the coming weeks.

A return to wool in fashion trends will further stimulate demand from Italy for finest qualities.

Prices of 18.5 microns dramatically rose in euro terms during the rally in January-February, as reflected by our graph below.