Commodity prices have been all over the place of late, today's FT reports that the price of wool has doubled in recent weeks. This is in part due to increased demand from China, where the new bourgeoisie class continue to desire the same goods that us westerners take for granted. Basic economics would confirm the law of supply and demand, where demand exceeds supply, prices rise. The droughts in Australia, now the worlds largest wool producer has also contributed to the shortage of wool. Wool is now priced at around $14.85 a kilo. The recession has so far meant that the bulk of the cost has been assumed by suppliers, but retailers are now warning that many wool products are expected to increase by around 10%. So the summer sales may be a good opportunity to renew your autumn collection...all rather reminiscent of the Wallace and Gromit movie "A Close Shave".
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