A Federal Government wool trade policy program to support industry expansion and trade risk mitigation has been urged following the release of a final report aimed at the diversification of early-stage wool processing. WoolProducers Australia on Monday released its Deloitte Economics-commissioned report into developing early-stage wool processing in Australia and overseas in a bid to diversify the existing wool processing supply chain. The $800,000 Federal Government-funded study was also injected with a further $300,000 from industry and AusHub. In 2021, phase one of the study identified that diversification of 50 per cent of Australia’s wool production could deliver up to $1.1 billion in trade risk mitigation. Other significant opportunities included additional jobs, freight efficiencies, positive contribution to GDP and alignment with numerous government policy objectives such as biosecurity, economic contribution and supply chain prominence. In 2022, phase two aimed to understand the options available and actions required to diversify and complement existing trade patterns of early-stage wool processing of Australian wool. This study found it would cost $1.1 billion to set up early stage wool processing in Australia, including the construction of six to 14 plants creating 600 jobs. WPA general manager Adam Dawes said the phase two work took place in two distinctive, yet interdependent streams. “The first stream being the development of a business case for expanding early-stage processing in Australia, with the most likely scenario being increased pre-export scouring,” he said. “This would require supply chain adjustment with potential exports to diversified countries that have new top-making operation coupled with existing, planned, or future spinning operations. “The second stream was the development of road maps for the expansion of early-stage wool processing in Vietnam, India and Bangladesh.” Mr Dawes said each of the three countries had well-established textile industries. “Individual roadmaps for each country were developed with findings catered to their specific textile industry needs and experience in relation to the use of Australian wool,” he said. “These roadmaps have evidenced that there are clear opportunities to instigate, collaborate and cultivate early-stage wool processing in each of the three countries.” The wool textile supply chain is one of the most complex agri-product supply chains in the world with many interdependent steps. Consultations throughout the project found that downstream supply chain partners including spinners, knitters, weavers and garment manufacturers also wanted to expand their supply chains to mitigate procurement risks. “Supply chain diversification and expansion is in everyone’s interest, but it’s no one’s responsibility,” Mr Dawes said. “With Australia producing 80 per cent of the world’s apparel wool, we need to continue investment in this space.” He said to deliver the full potential of this work, the Federal Government had been asked to establish a three-year wool trade policy program to support the Australian wool industry to expand the trade and mitigate trade risk. Mr Dawes said such a program would seek to commence implementation of the findings of the business case and roadmaps to deliver improvement in supply chain trade risk exposure, and add prosperity to rural and regional communities. “This work must be supported and sustained by trade policy activities,” he said.