China raises import quota on Australian wool

MELBOURNE (Reuters) - China has raised its import quota on Australian wool this year, Australia's Department of Foreign Affairs and Trade said on Saturday, a rare positive sign in increasingly strained relations between the two countries.

"Australian wool producers are gaining increased access to China through the China Australia Free Trade Agreement," the department's press office said in a statement.

Under the 2015 agreement, China, which takes a third of all Australia's exports, grants duty-free treatment to Australian wool up to the quota level for a given year. The 2021 quota will increase to 38,288 tonnes from 36,465 tonnes.

This comes after China last year blocked billions of dollars worth of Australian exports, from lobsters to wine, while refusing to accept phone calls from Australian ministers seeking talks as diplomatic tension rose.

Contributing to the deterioration in bilateral relations, Canberra has been a leading voice in calling for an independent inquiry into the origins of the novel coronavirus, first detected in Wuhan in late 2019.

Australia controls 90% of global fine-wool exports, where prices are largely driven by Chinese wool mills and Italian garment makers.

(Reporting by Lidia Kelly; Editing by Grant McCool and William Mallard)

By Lidia Kelly