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ese sheep have never been so popular. Fine wool sales are booming in Australia, which controls 90% of global exports. The fiber makes its way into garments from fine Italian suits to comfortable activewear. But global consumers maybe shouldn't get too comfortable, because Australia's flocks are under threat.
Demand has pushed the benchmark price of merino wool to a record high. In a normal market, producers would respond by making more wool, eventually bringing that price down. But as Reuters' Jonathan Barrett reports, this is not a normal market.>> Australia's eastern states are in severe drought and farmers are struggling to keep their flocks alive.
And so what's happening, that at the very same time as demand is booming from overseas buyers, farmers are unable to increase their flocks.>> In fact, flocks are set to shrink. The drought has pushed up the cost of livestock feed, and farmers are now selling off some of their flocks as mutton in order to save money.
Experts says that adds up to a drop in wool production this year. And that's bad news for the fashion industry, especially fast fashion or affordable retailers and their consumers.>> Wool brokers were telling us that there was an expectation that prices would start to drop, and that just hasn't happened.
And so these prices will flow through to the mills, to the garment makers, and ultimately to the retailers. So they'll either need to pass on the costs to customers or consume the costs themselves.>> Another solution, retailers could switch out wool for cotton or synthetics like polyester, a change that consumers might just have to get used to.
Australia's drought is expected to linger until 2019, although experts warn that wool may be in short supply even after that. Unlike natural plant fibers, wool takes time to grow, and it could be years before farmers build up healthy flocks once again.