Market evolution: Wool and animal hair (CN 51) — 2015–2025

Introduction

This report examines the evolution of EU trade in products covered by customs heading 51 — Wool, fine or coarse animal hair; horsehair yarn and woven fabric — between 2015 and 2025. The product group encompasses raw wool, animal hair, processed (carded/combed) wool, yarn, and woven fabrics, covering the full value chain from raw fibre to finished textile. Over the studied decade, EU trade in CN 51 has undergone significant structural change: traded volumes have contracted markedly while unit values have risen, traditional sourcing and destination patterns have shifted, and EU domestic production has declined steeply. The following sections detail these dynamics, drawing on overall trade data, partner-level breakdowns, and production and specialisation indicators.

1. Falling volumes, rising prices: a decade of value–quantity divergence

A defining feature of the 2015–2025 period is that both import and export volumes declined sharply while unit prices rose significantly, leaving trade values relatively more resilient than the tonnage figures alone would suggest.

1.1 Export volumes contracted by a third while values fell only modestly

EU exports to non-EU countries dropped from 138,463 tonnes in 2015 to 91,965 tonnes in 2025, a decline of 33.6%. Over the same period, the average export price per tonne rose from €11,627 to €15,120 (+30.0%), absorbing much of the volume loss. In value terms, exports fell from €1.61 billion to €1.39 billion, a more moderate decline of 13.6%. The lowest export volume was recorded at 77,431 tonnes (around 2020), coinciding with the COVID-19 pandemic, while the highest unit price reached €19,235/t, reflecting a long-term upward trend in the value content of EU wool exports.

1.2 Imports followed a parallel trajectory with slightly smaller declines

EU imports from non-EU countries fell from 162,664 tonnes to 116,475 tonnes (−28.4%) and from €1.49 billion to €1.38 billion (−7.2%). Import unit values climbed from €9,135/t to €11,833/t (+29.5%). The narrower decline in import value versus export value contributed to a dramatic erosion of the EU's merchandise trade surplus in this product group.

1.3 The EU's trade surplus nearly evaporated

In 2015, the EU held a trade surplus of approximately €124 million in CN 51 products. By 2025, this had shrunk to just €12 million — a 90.1% reduction. At its worst point during the decade, the EU even recorded a deficit of €358 million, underscoring a structural weakening of the EU's net-exporter position. The net import reliance indicator, while remaining negative (confirming the EU is a net exporter), shifted from −18.9% to −21.2%, suggesting that the EU's outward orientation slightly deepened even as the trade balance deteriorated — a reflection of the simultaneous decline in domestic production (see Section 3).

2. Geographical reshuffling: traditional suppliers recede, new partners gain ground

The decade saw notable shifts in the EU's trade geography, with the United Kingdom's role declining post-Brexit, traditional Southern Hemisphere wool suppliers losing market share, and emerging economies — particularly Morocco, India, and South Africa — rising in importance.

2.1 Brexit reshaped UK–EU wool trade flows

The United Kingdom was the EU's third-largest import source (€233 million in 2015) and second-largest export destination (€215 million). By 2025, imports from the UK had fallen to €171 million (−26.5%) and exports to the UK to €120 million (−44.3%). The sharpest decline in exports was recorded at the UK partnership level, consistent with the trade frictions introduced by Brexit. The UK fell from being the EU's second-largest export market to third, overtaken by Türkiye.

2.2 Traditional raw-wool suppliers experienced steep volume and value drops

Australia, New Zealand — historically the EU's primary sources of raw wool — saw significant import declines. Australian imports fell from €162 million to €109 million (−33.0%), and New Zealand from €98 million to €58 million (−41.1%). This reflects both the global contraction in sheep farming in these countries and the EU's own falling demand for raw wool as domestic processing capacity shrank. Chile, while a smaller supplier, showed the highest import volatility (coefficient of variation of 0.45), indicating an unreliable sourcing base.

2.3 South Africa and Latin American suppliers gained share in EU imports

While traditional suppliers retreated, South Africa's exports to the EU rose from €60 million to €83 million (+38.0%), and Argentina and Uruguay also posted modest gains of +12.8% and +13.2% respectively. China remained the EU's single largest import source throughout the period (€447 million → €455 million, +1.8%), consolidating its dominance particularly in processed wool products such as 5105 (carded/combed wool) and 5102 (fine animal hair).

2.4 Morocco and India emerged as fast-growing EU export markets

On the export side, the most striking growth came from Morocco and India. Exports to Morocco nearly doubled, rising from €58 million to €114 million (+94.2%), making it the EU's fourth-largest export destination by 2025. Exports to India grew by 70.6% (from €17 million to €29 million). Both countries are significant textile-manufacturing hubs, and their rising demand likely reflects growing downstream processing capacity that sources semi-finished EU wool products. Meanwhile, exports to Hong Kong fell by 57.7% (€177 million → €75 million), and to the United States by 33.9% (€110 million → €72 million).

2.5 Italy anchored intra-EU specialisation, with limited diversification across the bloc

Within the EU, Italy dominated both imports (€770 million in 2025) and exports (€898 million), accounting for the largest share of the bloc's wool trade. Italy's Revealed Symmetric Comparative Advantage (RSCA) stood at 0.67, confirming deep specialisation in wool products. Bulgaria (RSCA 0.78) and Lithuania (RSCA 0.70) also showed strong specialisation, though on a much smaller scale. By contrast, large economies like the Netherlands (RSCA −0.87) and Germany showed limited specialisation, indicating that EU wool trade remains geographically concentrated among a handful of member states.

3. Structural transformation: declining domestic production and a shift to higher-value products

The trade data reveal a deeper structural story: the EU's domestic wool-processing industry has contracted dramatically, while the product mix of both imports and exports has shifted toward higher-value segments.

3.1 EU wool production collapsed by over 60%

According to production data, EU production of CN 51 products fell from 685,741 tonnes in 2015 to 252,542 tonnes in 2025, a decline of 63.2%. Production value fell from €4.79 billion to €2.85 billion (−40.5%). The slower decline in value than quantity implies that surviving EU producers have moved up the value chain, concentrating on higher-value-added products. This contraction is consistent with long-term trends of textile manufacturing relocating outside the EU, rising labour costs, and competition from Asian producers.

3.2 Trade intensity and export propensity increased despite falling volumes

Paradoxically, even as production declined, the EU's trade intensity rose from 44.6% to 61.1% (+37.0%) and export propensity climbed from 34.4% to 48.9% (+42.3%). This means that the EU wool sector has become significantly more outward-oriented: a growing share of a shrinking production base is being channelled into export markets. Italy's central role (80.1% of EU export production value) helps explain this dynamic — Italian luxury textile firms increasingly serve global markets.

3.3 The product mix shifted toward processed and finished goods

A breakdown of the product segments reveals important compositional changes:

On the import side, raw wool (5101) volumes fell from 87,393 tonnes to 61,331 tonnes (−29.8%), while retail yarn (5109) imports grew from €47 million to €117 million (+147.7% in value). This signals a declining appetite for raw inputs and a growing reliance on imported finished yarn, consistent with the hollowing-out of EU processing capacity.

On the export side, woven fabrics of combed wool (5112) remained the highest-value export category at €622 million in 2025, though its volume fell from 13,609 tonnes to 9,272 tonnes (−31.9%). Notably, retail yarn exports (5109) nearly doubled in value (€54 million → €98 million), suggesting the EU is capturing more value from downstream products. Fine animal hair (5102) carried an exceptionally high import unit value of approximately €67,733/t in 2025, indicating its status as a luxury/speciality fibre.

The value decline in raw wool exports (−64.7%) was far steeper than in fabric exports (−4.8% to −9.5%), confirming that the EU's competitive advantage has migrated upstream from raw material re-exports toward finished and semi-finished textiles.

3.4 2022 stood out as a year of price shocks

The volatility analysis identified 2022 as a year of pronounced price shocks. Export prices to India surged by +109.2% and to Türkiye by +83.5% relative to trend, while import prices from Argentina spiked by +26.5%. These anomalies are consistent with the global commodity price surge that followed the post-COVID recovery and the disruption of energy and logistics markets in 2022. The concentration of these shocks in a single year underscores the sensitivity of wool trade to macroeconomic and supply-chain disruptions.

Conclusion

The EU wool and animal hair trade (CN 51) underwent a profound structural transformation between 2015 and 2025. Traded volumes declined by roughly 30% on both the import and export sides, driven by a 63% collapse in domestic production and the long-term migration of textile manufacturing outside Europe. However, unit prices rose by approximately 30%, cushioning the fall in trade values and reflecting a compositional shift toward higher-value products — particularly woven fabrics and retail-ready yarn.

Geographically, Brexit significantly reduced the UK's role as both a supplier and a customer. Traditional Southern Hemisphere wool exporters (Australia, New Zealand) lost ground, while China consolidated its position as the dominant import source. On the export side, Morocco and India emerged as fast-growing markets, likely reflecting expanding textile manufacturing capacity in those countries. Within the EU, Italy remained the overwhelmingly dominant player, accounting for the lion's share of both imports and exports and anchoring the bloc's comparative advantage.

Looking ahead, the EU's increasing trade intensity and export propensity — now at 61% and 49% respectively — mean the sector is more exposed to external demand fluctuations and supply-chain risks than it was a decade ago. The concentration of production in a small number of member states, combined with a shrinking domestic raw-material base, presents both an opportunity (specialisation in high-value niches) and a vulnerability (limited resilience to disruptions), as the 2022 price shocks vividly demonstrated.