Australian firm Champion Wool Factory presents its wool products during the China International Consumer Products Expo in Haikou, capital of South China's Hainan Province on May 8, 2021. File Photo: Zhang Hongpei/GT

China is now the most important market for Australia's wool industry, with exports to China reportedly accounting for 82 percent of its wool clip exports. This trend is expected to continue amid significant improvement in China-Australia relations as well as rising demand in the Chinese market, observers said.

Chinese purchases accounted for 82 percent of Australia's wool exports from July 1 to December 31 last year, according to data from the Nanjing Wool Market. Indian purchases accounted for only 5 percent, while sales to Italy and the Czech Republic were even smaller, local news outlet The Australian reported. In 2021, the ratio once peaked at 90 percent, compared with 4.2-percent back in 1990.

"Chinese companies prefer Australian wool because of its high quality. Australia raises merino sheep, whose wool is of superior quality. It can be used in various worsted and woolen products," Yang Xiaoxiong, chairman of Nanjing Wool Market, told the Global Times.

Another woolen sweater dealer, Li Chunyu, based in Jiaxing, East China's Zhejiang Province, told the Global Times that 45 percent of the company's woolen sweaters are made with Australian wool imports.

"There are certain differences between homegrown wool and Australian wool. Some sweater manufacturing has high requirements for materials, and products made with Australian wool can achieve a satisfying result," Li said.

John Roberts, chief executive of Australian Wool Innovation, was quoted as saying in a Xinhua report on Friday that "increased demand for wool and a growing appetite for locally made brands in the Chinese market are expected to drive an increase in the amount exported from Australia to China."

The growing importance of the Chinese market comes as bilateral relations between China and Australia have seen signs of improvement in recent months. In early May, Australian Trade Minister Don Farrell paid a visit to China, adding to growing interactions between Chinese and Australian officials following a meeting of the countries' top leaders in Bali, Indonesia in November 2022.

Roberts noted that the trade relationship between China and Australia "is rock solid and always has been," the Xinhua report said.

In an earlier interview with the Global Times, Chinese Ambassador to Australia Xiao Qian said that bilateral economic and trade relations now face an important window of opportunity. "As the trade between China and Australia is highly complementary and with the recovery of consumption and economic growth, the demand for each other's products will rise steadily," Xiao said.

In January, China's Ministry of Commerce set its 2023 import quota for Australian wool at 42,213 tons, up from 40,203 tons last year.