Market evolution: Wool yarn (CN 5109) — 2015–2025

Introduction

This report analyses the evolution of EU extra-EU trade in CN 5109 — yarn of wool or fine animal hair, put up for retail sale — over the period 2015–2025. The product covers two sub-headings: yarn containing ≥85% wool or fine animal hair by weight (510910) and yarn containing predominantly but less than 85% (510990). Over the decade, the EU market for this product underwent a fundamental transformation. The bloc shifted from a modest trade surplus to a sizeable deficit, import values nearly tripled, and the geographic centre of gravity tilted decisively toward the Nordic region. At the same time, domestic production volumes stagnated even as unit values doubled, and trade intensity surged from 2% to 73%, signalling deepening global integration. These dynamics reflect a combination of macroeconomic forces — post-pandemic recovery, cost-push inflation — and sector-specific shifts, including rising consumer demand for natural fibres and the consolidation of Nordic wool-yarn supply chains.

1. From Surplus to Deficit: A Decade of Structural Trade Reversal

The EU moved from a modest surplus to a pronounced trade deficit

In 2015, the EU recorded a small trade surplus of €6.6 million in CN 5109, exporting €53.7 million while importing €47.1 million. By 2025, this position had reversed entirely: exports reached €98.1 million, but imports surged to €116.6 million, generating a deficit of €18.4 million. The trade overview confirms that this −378.5% swing in the balance was driven by import growth (+147.6% in value) far outpacing export growth (+82.8%).

At its most export-oriented point over the period, net import reliance reached −44.7%, indicating that the EU was at times a strong net exporter. The reversal to +8.7% by 2025 — near the decade's peak — marks a structural shift in the EU's competitive position.

Rising unit values amplified the value growth on both sides

The gap between value and quantity growth reveals that price inflation, not just volume expansion, drove the trade surge. EU export quantities grew by 47.2% (from 1,909 tonnes to 2,809 tonnes), while export unit values rose 24.2% (from €28,134/t to €34,940/t). On the import side, quantities rose 65.3% (from 2,543 tonnes to 4,202 tonnes), but unit values increased even faster at 49.8% (from €18,513/t to €27,738/t). The steeper price inflation on the import side meant that the EU was absorbing significantly more tonnage at progressively higher costs — a key driver behind the trade-balance deterioration.

The high-wool-content segment drove the fastest import growth

The two sub-headings within CN 5109 followed distinct trajectories. Imports of 510910 (≥85% wool) more than doubled in volume, from 803 tonnes to 1,644 tonnes (+104.7%), and nearly tripled in value (from €16.3 million to €47.8 million, +193.3%). Imports of 510990 (<85% wool) grew more moderately — +47.1% in volume and +123.1% in value. The premium segment thus expanded most rapidly, likely reflecting growing consumer preference for higher-purity wool products, possibly linked to sustainability trends favouring undiluted natural fibres.

On the export side, both segments grew at comparable volume rates (~47%), but the lower-wool-content segment generated higher value growth (+93.9% vs. +68.6%), suggesting that blended-yarn products gained ground in external markets.

2. The Nordic Reorientation and Deepening Geographic Concentration

Norway emerged as the EU's dominant partner on both trade sides

The most striking geographic shift over the decade was the ascent of Norway as the EU's principal partner for CN 5109 — both as a source of imports and as an export destination. The partner data shows that EU imports from Norway surged from €7.9 million to €43.8 million (+454.2%), while exports to Norway jumped from €8.3 million to €49.4 million (+494.8%). Total bilateral trade with Norway thus grew from €16.2 million to €93.2 million — a near-sixfold increase that raised Norway's share of total EU extra-EU CN 5109 trade from approximately 16% to 43%.

Peru's rapid growth on the import side (+245.0%, to €30.3 million) is noteworthy and likely reflects rising EU demand for fine-animal-hair yarn — the CN 5109 category encompasses alpaca and similar fibres in which Peru holds a strong comparative advantage. Iceland, despite its small base, grew by +499.5%, consistent with the international popularity of Icelandic Lopi-style yarn.

Meanwhile, traditional partners saw more modest or declining trajectories. The United Kingdom — the EU's former top market — saw exports decline by 21.0%, likely reflecting post-Brexit trade frictions. US-bound exports also slipped slightly (−7.3%). Chinese imports, by contrast, stagnated (+4.3%), suggesting that low-cost Asian competition played a relatively minor role in the EU market for this product.

Nordic EU member states consolidated their role as import gateways

The member-state breakdown reveals a pronounced Nordic concentration of EU import activity. Sweden's imports soared from €13.8 million to €60.2 million (+334.7%), making it the EU's largest importer in 2025 — ahead of Germany (€21.3 million), which had been the leader in 2015. Denmark (€5.2M → €19.6M, +276.0%) and Finland (€0.6M → €3.6M, +465.7%) also expanded dramatically. Together, these three Nordic members accounted for approximately €83 million of the EU's €116.6 million imports in 2025 — a combined 71% share. Given Norway's dominance as an import source, it is likely that much of this Nordic import activity reflects cross-border trade flows within the Scandinavian region.

On the export side, Italy remained the EU's largest exporter (€30.1M → €32.3M, +7.2%), but its dominance eroded as Nordic and Eastern European exporters surged. Sweden's exports leapt from €2.2 million to €16.1 million (+617.3%), Denmark's from €1.1 million to €10.0 million (+835.7%), and Romania's from €6.0 million to €18.1 million (+203.6%).

Geographic concentration intensified on both sides

The Herfindahl-Hirschman Index (HHI) confirms the deepening concentration. The export-side HHI by value more than doubled, from 1,386 to 2,918 (+110.6%), crossing the 2,500 threshold commonly used to define a highly concentrated market. In volume terms, the export HHI surged from 1,307 to 3,338 (+155.4%). Import-side concentration also increased, with HHI by value rising from 1,591 to 2,377 (+49.4%).

The divergence between value and volume concentration on the export side is particularly notable: it indicates that high-unit-value destinations — above all Norway — have captured an outsized share of export revenues, while volume is distributed somewhat more broadly.

3. Price Pressures, Production Stagnation, and Emerging Supply Risks

Domestic production volumes edged down while values doubled

Production data shows that EU production of CN 5109 declined slightly in volume, from approximately 18,604 tonnes in 2015 to 17,500 tonnes in 2025 (−5.9%). Over the same period, production value doubled from €84.0 million to €172.0 million (+104.8%). This implies that the average unit value of domestic output roughly doubled — from approximately €4.5/kg to €9.8/kg — reflecting either a shift toward higher-value product mixes, significant cost-push inflation in raw materials and energy, or both.

The production series shows considerable volatility: at its trough — likely during the 2020 pandemic — output fell to approximately 8,317 tonnes, while at its peak it reached 23,621 tonnes. The combination of flat-to-declining production and surging imports underscores a structural capacity gap that the EU has increasingly filled through external sourcing.

Price shocks were detected in several bilateral relationships

The volatility analysis identifies several partners with high coefficient-of-variation (CV) scores on the import side, including Serbia (CV 1.44), North Macedonia (CV 1.04), and Iceland (CV 0.59). Three significant price shocks were detected:

• Tunisia (exports, 2023): A price shock with a +407.7% shift and an abnormality score of 20.9, though Tunisia accounted for only 1.0% of total export value.
• United Kingdom (exports, 2018): A price shock with an +85.4% shift (abnormality 6.2), affecting 12.6% of export value. This timing coincides with the period of Brexit-related trade uncertainty, which may have caused pricing distortions or supply adjustments.
• China (imports, 2019): A price shock with a −22.2% shift (abnormality 2.3), affecting 10.7% of import value, potentially linked to broader trade tensions redirecting supply flows.

While these shocks were localised, they illustrate the exposure of EU trade to bilateral disruptions — particularly concerning as concentration has deepened.

Trade intensity and export propensity surged to historic highs

The vulnerability indicators reveal a dramatic opening of the EU market to international trade. Trade intensity rose from 2.0% in 2015 to 72.9% in 2025, while export propensity climbed from 1.9% to 55.3%. These figures imply that the EU's CN 5109 market, once largely self-contained, has become deeply integrated into global supply chains. While this openness brings access to diverse supply sources and larger external markets, it also heightens exposure to exchange-rate fluctuations, geopolitical disruptions, and supply-chain bottlenecks.

Specialisation remains concentrated in a small group of member states

The specialisation data for 2025 shows that a handful of EU members underpins the bloc's competitive position:

Italy holds the largest production share (33.2%), but Sweden exhibits the highest revealed comparative advantage (RCA of 8.74) and the strongest normalised specialisation index (RSCA of 0.79). Several member states — including Hungary, Croatia, Ireland, and Luxembourg — show near-zero specialisation, indicating that CN 5109 production and trade is geographically concentrated within the EU itself, reinforcing the Nordic and Mediterranean character of the industry.

Conclusion

Over 2015–2025, the EU market for retail wool yarn (CN 5109) underwent a fundamental structural transformation. The bloc shifted from a €6.6 million trade surplus to an €18.4 million deficit, as imports grew by 147.6% in value — nearly twice the rate of exports (+82.8%). The geographic centre of trade flows rotated decisively toward the Nordic region: Norway became the EU's largest partner on both the import and export sides, accounting for over 40% of total bilateral trade by 2025, while Sweden, Denmark, and Finland consolidated their roles as the EU's primary import gateways. This Nordic reorientation was accompanied by sharply rising trade concentration — the export-side HHI now exceeds 2,900 — and by a doubling of production unit values despite flat domestic output volumes. The surge in trade intensity (from 2.0% to 72.9%) and export propensity (from 1.9% to 55.3%) signals that a market once largely self-sufficient has become deeply exposed to global supply chains and external shocks. Looking ahead, the growing import dependence, the concentration of trade in a small number of Nordic corridors, and the exposure to volatile partner markets all warrant close monitoring by policymakers and industry stakeholders alike.