Magallanes Wool Commercialization Program Aims to Enhance the Value of Production in Chile’s Southernmost Region

The Magallanes Wool Commercialization Program, promoted by the Foundation for Agricultural Innovation (FIA), has concluded its strategic diagnostic phase after more than four months of intensive work, during which key challenges related to wool commercialization in the region were identified and analyzed.

This process involved interviews and surveys with producers, researchers, and public officials from development institutions, complemented by statistical analyses of the market, exports, and international trends.

“It was very interesting to integrate existing knowledge about the wool market. We observed, as in other sectors, a growing gap between value-added products and commodities—an increasingly difficult trend to reverse, highlighting the need to build closer relationships with customers and identify niche markets. Additionally, a key advantage remains that Magallanes wool has unique characteristics that allow it to achieve distinct market identification,” stated Inti Nuñez, the project’s lead coordinator.

Following the diagnostic phase, the program now moves into its second stage: validating the challenges identified. This phase will involve wool producers, commercial agents, and key stakeholders in defining the specific problems to be addressed through open innovation challenges. “Through this project, we seek to explore potential solutions by analyzing the entire value chain, applying a participatory innovation methodology and co-creation process with producers and other relevant actors,” explained Paula Orellana, FIA’s Regional Representative in Magallanes.

This economic sector remains one of the most significant at the regional level. However, over the past 20 years, global wool production and market value have experienced a sharp decline. In the clothing industry alone, wool has lost 40% of its market share. Additionally, the COVID-19 pandemic significantly impacted international markets and product demand, with wool being one of the hardest-hit sectors.

Irene Ramírez, Regional Minister of Agriculture for Magallanes and the Chilean Antarctic, commented, “This program represents the efforts of our Ministry of Agriculture, through FIA, to provide direct support to the livestock sector in addressing the challenges of commercializing regional wool, which has distinctive qualities that could position it as a unique fiber in international markets. The value of this program lies in how it enables us to co-create solutions with the productive sector based on the diagnostic findings.”

The profitability of wool production, particularly for medium and coarse wools, has declined in most producing countries. Despite this, the wool industry remains a predominant commercial activity in Magallanes.

Adding to these challenges, the closure of the Standard Wool processing plant has had a negative impact on the sector, limiting a key channel for adding value to the regional product.

For full details on the program, including the diagnostic report, activity schedule, and innovation challenges to be addressed, visit www.lanamagallanica.cl