Market evolution: Greasy wool (CN 510111) — 2015–2025

Introduction

This report examines the evolution of EU trade in greasy shorn wool (customs code 510111) over the period 2015–2025. The product covers greasy shorn wool and fleece-washed wool that has neither been carded nor combed — a primary raw material at the very beginning of the textile value chain. The EU is structurally dependent on external suppliers for this commodity, as European domestic wool production is insufficient to meet industrial demand, particularly from the Italian and Central European textile sectors.

Over the decade examined, EU trade in this product has undergone a pronounced contraction in both volumes and values, alongside significant geographical and price shifts. The analysis that follows is organised around three main dynamics: (1) the broad decline of trade combined with a striking divergence between import and export prices; (2) a reorientation of sourcing patterns away from traditional partners toward new ones; and (3) the role of supply shocks and volatility in reshaping the market.

Scope & Definitions

1. A Market in Contraction: Shrinking Volumes and a Widening Price Gap

1.1. Both imports and exports have declined sharply in volume and value

The most striking feature of EU greasy wool trade over the past decade is a broad and persistent contraction. Total import value fell from €220.8 million in 2015 to €190.6 million in 2025 (−13.7%), while import volumes dropped more steeply from 44,988 tonnes to 32,891 tonnes (−26.9%). On the export side, the decline has been even more dramatic: export value collapsed from €83.6 million to €25.5 million (−69.5%), and export volumes fell from 55,091 tonnes to 32,091 tonnes (−41.7%).

General Overview

1.2. Import and export prices have diverged in opposite directions

While volumes fell on both sides, prices moved in opposite directions — a dynamic that reveals a structural shift in the EU's position in this market. The average unit price of EU greasy wool exports declined from €1,518 per tonne in 2015 to €794 per tonne in 2025 (−47.7%), while the average unit price of imports rose from €4,907 to €5,796 per tonne (+18.1%). The EU now pays roughly 7.3 times more per tonne for its imported greasy wool than it receives for its exports, up from a ratio of about 3.2× in 2015.

This widening price gap is consistent with a scenario in which the EU increasingly imports higher-quality (or better-sourced) greasy wool — potentially finer merino grades from Australia or South Africa — while exporting lower-value residual or coarser wool. It may also reflect the fact that the EU's remaining export flows are directed toward price-sensitive markets. The minimum export price over the period was €778/t (close to the 2025 level), suggesting that recent export prices are near a floor.

1.3. The trade deficit has widened despite lower import volumes

The EU's trade deficit in greasy wool expanded from €137.2 million in 2015 to €165.1 million in 2025 (−20.4%), reaching a trough of €362.7 million at its worst point. This is a counterintuitive result: one might expect that lower import volumes would narrow the deficit. However, the simultaneous collapse of export revenues — driven by both lower volumes and sharply lower unit prices — more than offset any savings on the import side. In effect, the EU is paying nearly as much for less wool, while earning far less from what it re-exports.

2. Geographical Reorientation: From Traditional Dominance to Diversified and Emerging Partners

2.1. Australia's share of EU imports has declined, while South Africa has surged

Australia remained the EU's largest single supplier of greasy wool throughout the period, but its share eroded significantly. Import value from Australia fell from €143.7 million in 2015 to €95.2 million in 2025 (−33.7%). In contrast, imports from South Africa surged from €15.7 million to €49.1 million (+213.6%), making it a far more prominent second supplier. Other Southern Hemisphere suppliers — New Zealand (−21.0%), Argentina (−40.2%) — also declined, though Uruguay (+176.5%) and the Falkland Islands (+331.9%) grew from much smaller bases.

The decline of the United Kingdom as an import source (−73.4%) is noteworthy and likely reflects the disruption of trade flows following Brexit, as UK-origin wool now faces different regulatory and customs arrangements when entering the EU.

Top partners by value

2.2. EU export destinations have contracted almost universally

On the export side, the EU's traditional buyers have pulled back sharply. Exports to China — by far the largest destination — fell from €61.4 million to €17.6 million (−71.4%). Shipments to Türkiye (−81.5%), the United Kingdom (−63.6%), and India (−43.6%) all declined. The only notable growth was in exports to Egypt (+432.3%), though from a very small base (from €78k to €417k).

The collapse of the China-bound trade is the single most consequential development on the export side. China's role as the world's dominant wool processor means this decline likely reflects a combination of shifting sourcing preferences (Chinese buyers increasingly procuring directly from origin countries), reduced EU re-export volumes, and possibly changing Chinese demand patterns.

2.3. Import concentration has decreased, while export concentration remains elevated

The Herfindahl-Hirschman Index (HHI) for imports fell from 4,491 to 3,313 (−26.2%), indicating a meaningful diversification of EU sourcing. This is consistent with the rise of South Africa, Uruguay, and the Falkland Islands as supplementary suppliers to the dominant Australian flow. Export concentration also declined somewhat (from 5,618 to 5,035; −10.4%) but remains higher, reflecting the continued dominance of China as the primary export destination.

Concentration analysis

3. Internal EU Realignment: Intra-Union Trade Shifts and Supply Shocks

3.1. Italy has consolidated its role as the EU's primary greasy wool importer

Among EU Member States, Italy remains the dominant importer of greasy wool, accounting for €104.9 million in 2025 — more than half of all EU imports. Italy's position barely changed over the decade (−11.9%), reflecting its central role in Europe's fine wool textile industry (Biella, Prato). Czechia, the second-largest importer, saw a modest decline (−15.3%). However, the most dramatic intra-EU shift has been Bulgaria, which grew from €3.8 million to €13.4 million (+254.6%), likely reflecting the expansion of textile manufacturing capacity in Southeast Europe.

Top reporters by value

3.2. EU export activity has collapsed in most Member States, with France as the sole resilient player

The EU's greasy wool exports have disintegrated in nearly every Member State that previously participated in this trade. Spain's exports fell from €21.1 million to under €1 million (−95.8%), Belgium from €15.9 million to €1.6 million (−89.8%), and Romania from €8.6 million to €1.7 million (−80.5%). Hungary, Ireland, and Italy all saw declines exceeding 37%. The sole partial exception is France, whose exports declined only 10.8% (from €9.4 million to €8.4 million), suggesting some structural resilience — possibly linked to its own wool production and established trade networks.

3.3. Two significant price shocks punctuated the period

The volatility analysis reveals two notable supply-side price shocks in EU greasy wool imports:

1. South Africa, 2020 (COVID-19 pandemic): A price shock with an abnormality score of 6.6 and a −29.3% price shift. The 2020 disruption coincided with the onset of the COVID-19 pandemic, which severely disrupted global logistics, textile demand, and wool auctions. South Africa, accounting for 23.2% of import value at the time, transmitted a sharp price disruption into the EU market.

2. Australia, 2022: A price shock with an abnormality score of 5.6 and a +38.0% price shift. This event coincided with the global commodity price surge of 2022, driven by post-pandemic demand recovery, energy cost inflation, and supply chain pressures. Given Australia's dominant share of 63.5% of import value, this shock had an outsized impact on EU import costs.

The coefficient of variation for import partners ranges from 0.16 (New Zealand, the most stable supplier) to over 1.10 (Serbia), indicating that while major suppliers are relatively predictable, smaller or emerging sources carry substantial price and volume risk.

Volatility analysis

Supply shocks

Conclusion

The EU's trade in greasy shorn wool (CN 510111) over 2015–2025 tells a story of structural contraction, geographical reorientation, and price divergence. Import volumes have fallen by more than a quarter, and export volumes by more than two-fifths, while the trade deficit has widened despite the overall shrinkage. The EU is paying more per tonne for the wool it imports — increasingly from diversified sources led by Australia and now substantially supplemented by South Africa — while earning significantly less from its exports, which have become almost entirely reliant on China and are declining rapidly.

Within the EU, the market has concentrated around Italy and, to a lesser extent, Czechia as importers, with Bulgaria emerging as a notable new entrant. Export activity has largely ceased in most Member States, with France the only significant survivor. The 2020 pandemic and the 2022 commodity price surge both left visible marks on trade flows and prices, underscoring the vulnerability of a market dependent on long-distance, Southern Hemisphere supply chains.

Looking at specialisation patterns, Portugal and Spain show the highest revealed comparative advantage in this product, suggesting that some Southern European economies retain niche roles in the processing and trade of raw wool — even as the overall EU market shrinks. The continued decline in export prices and volumes, however, raises questions about the long-term viability of the EU as a meaningful participant in the global greasy wool trade beyond its role as a major importer for domestic textile processing.