As previous articles have pointed out, wool prices tend to follow general cycles and trends evident in the larger apparel fiber price complex. As with any population, there will be outliers, which over the past 18 months have been cotton (on the high side) and cross wool (on the low side). Thus, apparel fiber prices do not tell us where wool prices should necessarily be, but they do tell us what prevailing cycles and trends are in place. The practical implication of this market structure is that traders, at best, can only influence a small part of the price.
Figure 1 shows five-year rolling percentiles for a range of apparel fibers, starting in 2017 and running through September 2022 using US dollar prices. Viscose has been added, as a substitute for bamboo (for which more information was requested by a reader) which is part of the cellulosic group of fibres. In Figure 1, cotton and twill remain the outliers, outperforming and underperforming respectively. In the middle we have merino (on the low side), polyester staple fiber (PSF), viscose and now acrylic as well, which has joined the bulk of the fiber price rankings after outperforming in the market post-pandemic.
As mentioned above, bamboo fibers belong to the group of regenerated cellulose fibers (viscose and rayon for example) with a structure similar to cotton. As such, it is often blended with cotton, with lint prices quoted around cotton levels (although below the long quotations of Pima/Egyptian cotton).
In Figure 2, the price change in US dollars is shown for the same fibers as in Figure 1, using Spring 2017 as the base level (0%). This shows more clearly the clustered nature of price changes for clothing fibers, except for the two outliers (cotton and blend).
Figure 3 uses the same format as Figure 2 but focuses on natural fibers. Within this group, cashmere performs best, outperforming silk, merino and cross wool. Cross wool is the least efficient.
Deteriorating economic conditions in major economies indicate downward pressure on apparel fiber prices from the demand side of the market.