Instability of wool trade

Wool has been subject to intensive competition, due to price and technical characteristics, from synthetic fibres, which resulted in slowly falling wool prices as manufacturers switched to synthetics. As a result, producers were forced to reduce the size of sheep flocks. Such reductions, followed in recent years by droughts in Australia which killed many sheep (thus effectively cutting back production even further), have resulted in dramatic price increases. In addition, wools from developing countries have gradually lost ground to those from developed countries because of inadequate supplies and quality.