Impact on Aussie wool ‘unclear’ after China bans South African wool amid foot-and-mouth disease outbreak

Industry leaders say the impact on Australian wool following China’s ban on South African wool amid a foot-and-mouth disease outbreak in the country is “unclear” at this stage. The world’s biggest importer of the luxury fibre slapped a ban on South Africa from April 1 following the detection of the highly infectious viral disease on a commercial stud farm in the North West province in March. The ban — which echoes one placed during a 2019 outbreak which ended up lasting eight months — has already had a “massive impact” on South Africa’s wool industry, according to industry body Cape Wools SA. “The importance of the South African wool industry cannot be overemphasised as it supports around 40,000 communal and 8000 commercial farmers, their families,” a statement released by the organisation read. Of the 45 million kilograms of wool produced in South Africa annually, about 80 per cent is exported to China in the form of greasy wool, generating R 6 billion ($550 million AUD) for the economy. The latest detection sparked a nationwide response to control the disease, which was also detected in two locations in a formerly FMD-free zone. It is believed to be “spill over” from an outbreak in March last year which sparked a mass cattle vaccination effort which was at the time thought to have curtailed the disease, with the farm and other farms linked to the 2022 detection placed into quarantine while authorities determine the extent of the outbreak. If the disease was to enter Australia, it is anticipated to cost the nation’s economy $50 billion or $5b a year until its eradication. With China the main buyer of Australian wool — purchasing 80-90 per cent of the country’s wool-clip — it is anticipated the ban could have a flow-on effect to the $3.4b export industry. Australian wool generally makes up 60 per cent of China’s woolen imports, however, with strict new lockdown measures enforced in several major cities in the manufacturing mecca’s efforts to curb a surge in community transmission, manufacturing of the luxury fibre may be disrupted. It is part of the nation’s zero-COVID policy, but has sparked concern demand for Australian commodities may drop. Australian Wool Innovation chief executive John Roberts said it was a “very difficult situation to assess” given the COVID-19 lockdowns, which included Beijing. “It is unclear when some major textile factories in China will reopen and as a result what impact the import ban on South African wool will have on creating extra demand for Australian wool,” he said. China’s blanket ban on all cloven-hoofed derived products came as a “surprise” to the industry, Cape Wools SA claims, following the implementation of new measures after the initial 2019 outbreak, prompting calls for wool to be exempt from the import ban. “The wool industry is currently engaged with both national and international stakeholders to impress on them the fact that wool already complies with export requirements in terms of freedom from foot-and-mouth disease virus and should be excluded from this ban,” the organisation’s statement read.