Spain struggles with wool surplus

by admin
wool

Since September 2022, Spain has been grappling with the aftermath of an outbreak of sheep and goat pox. This disease, reappearing after 50 years, has brought numerous complications for Spanish sheep farmers and wool producers.

Despite Spain being declared safe again, the wool sector continues to struggle with the consequences. This is partly due to China closing its market to Spain.

The impact of sheep pox

In September 2022, the first case of sheep pox in Spain was confirmed, leading to the loss of the country’s pox-free status. This had significant consequences for wool exports, especially to a crucial market like China. Spain was officially declared safe again in September 2023. However, China refused to reopen its borders to Spanish wool, leaving a substantial amount of wool unused in Spain.

The role of China

China plays a critical role in the Spanish wool sector. In 2022, a third of Spanish wool (6,268 tonnes) was exported to China, far more than to other countries such as Morocco and Portugal. With the Chinese market closed, Spanish exports plummeted. Between March 2023 and March 2024, Spain exported only 9,000 tonnes, significantly less than the annual 14,000 tonnes before the closure.

Political and market factors

According to Felipe Molina, Secretary-General of the Asociación de Criadores de Merina (Aecme), politics is a factor in China’s refusal to reopen the market. Despite efforts by the Spanish government and European representatives to exert diplomatic pressure, China remains reluctant. Adrián Sánchez of Lanas de Extremadura suggests that China may no longer need Spanish wool due to a surplus and a shift towards synthetic fibres.

Internal and external challenges

Spanish wool production has been declining for over a decade, exacerbating current problems. The COVID-19 pandemic also contributed to the reduced demand, particularly due to a decrease in carpet production for hotels and cruise ships. Additionally, the rise in second-hand clothing and higher prices have impacted the demand for new wool products.

Surplus

More than a year after the closure of the Chinese market, the effects are still being felt. Tons of wool are piling up in Spanish warehouses without buyers. Companies like Lanas de Extremadura and Digaisa have over 3,000 tonnes in stock. Despite the high quality, it remains unsold in both national and international markets.

Problems in the sector

The wool sector in Spain not only has to deal with current surpluses but also with retaining specialized workers. Wool can also deteriorate if stored for too long, worsening the situation. Carlos Bernués of the cooperative Grupo Pastores warned in March about the global saturation of the market and the lack of storage space, further increasing pressure on the sector.

The future of Spanish wool

The Spanish wool industry is at a crossroads, needing strategic solutions to navigate these challenges. Efforts to diversify export markets, invest in new technologies, and promote the unique qualities of Spanish wool could be crucial steps forward. As Spain grapples with this surplus, the resilience and innovation of the wool sector will be tested in the coming years.

Also read: Spain hit hard by China’s investigation in pork import

ASSSA

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