``There's a feeling that things are turning the corner for the general textile industry,'' said Chris Wilcox of The Woolmark Co. It is a rare thing in the Australian Bush for both industries to have good times at the same time.

Once Australia's premier industry, wool has been unceremoniously dethroned in recent decades by sliding markets while having to bear the additional indignity of the rise of a glamourous new domestic cotton industry. Symbols of this spread far beyond the fact that the A$1.3 billion (US$820 million) which Australian cotton exports are forecast to earn in 1999/00 is gaining on wool exports of A$2.7 billion. Denim-jacketed Australian cotton producers, typically smart-set graduates of the 1960s, are sophisticated players on the New York cotton futures market.

Wool growers are still stuck with a more traditional approach. In fraying jumpers or tweed coats, they are still fussing about how to bring wool's auction system up to date. The Australian Wool Exchange, responsible for wool auction sales, only recently took a long-resisted step of introducing trial trading on computer screens.

Cotton joined wool in the pit of depression in 1998 and 1999 when the Asian crash wiped more than a quarter of world cotton prices. Wool was in an even more parlous state, with 1998 prices near a record low.

Australia is by far the largest wool producer in the world with one- third of production and is a growing force in the cotton market, accounting for about 11 per cent of world trade.

Now both cotton and wool are on the rise as demand for both fibres improves and as prices of synthetic fibres surge because of the rising price of crude oil.

``I think it's a genuine recovery. I think we're going to have volatility over the next couple of months but on an overall upward rising trend,'' Woolmark's Wilcox said.

``I think it caught most people by surprise,'' he said of a price surge when wool auctions resumed in mid-January. ``(It was) one of the biggest weekly rises we've had in a long time.'' Cotton spokesman Peter Corish sees cotton also on a roll.

``We (cotton and wool) have common competition in synthetic fibres. The cost of production of synthetics (which) has gone up with oil prices (is) helping both natural fibres,'' he said.

Prices of polyester and acrylic fibres began to rise around July/August last year, with acrylic soaring 33 per cent between July and December then adding a further five per cent from December to January. Polyester prices rose around 17 per cent between July and December, Woolmark figures show.

Wool was priced about 2.6-2.9 times more than synthetics in mid-1999. Now it is just over twice the price. At around 3.5 times more expensive than cotton, wool is still struggling against this fibre. But the more cotton rises the better wool looks, Wilcox said. Common views with wool extend only so far for Corish.

``No. Let's face it. Cotton has 40-odd per cent of the world market (as) a bulk fibre. Wool has around two-three per cent, it's a very specialist market,'' he said.

He sees cotton continuing to win over wool while at the same time staging a comeback against synthetics, whose inroads into Australia's cotton markets in the last five to six years are seen based purely on price.

``We're seeing quite considerable improvement in cotton consumption, particularly in Asia, with the increased cost of production of synthetics...'' chairman of the Australian Cotton Industry Council, Corish said. China is helping cotton and wool for different reasons.

``There's a bit of a scramble for wool,'' Wilcox said after China's release of a second batch of import quotas in early December helped produce very firm demand from Chinese mills. Better demand for raw wool was finally starting to emerge from Western Europe, which takes at least a third of Australia's exports, Wilcox said. Demand from Korea is very strong, while demand is also strong in Taiwan, Thailand and India.

Purchases by Japan, once the leading market for Australian wool, remain subdued. But Japan is not as important as before. ``It's a fairly broad-based pick-up. We think that it can be sustained, but with some volatility,'' Wilcox said. Cotton is also finding fair weather in difficult markets.

The threat of dishonoured contracts and letters of credit in Indonesia some months ago had not come to fruition, Corish said.

Australian producers were now getting A$410-A$420 a bale, well up on A$340-A$350 less than a month ago. ``That's the difference between a modest profit and only breaking even. It's a significant move,'' Corish said.

-- (Reuters)