AFTER a run of remarkably hot prices for fine wool, the Australian auction market finally relented with prices cooling this winter.
Prices for fine merino wool types deteriorated in June, which Karee Wool owner Alister Carr attributed to finalised export orders as Northern Hemisphere, particularly China, entered a traditionally slow retail period of early summer.
The impact of overseas manufacturers “waits and see” approach had resulted in softening prices for fine wools, which have fallen from the dizzying heights of 5000 cents a kilogram clean in May which was paid for 15.5 micron lot which yielded 71.4pc.
Mr Carr said medium Merino values remained less affected as export orders were stable, while crossbred wool remained sluggish throughout the entire season, exacerbated by surplus stock.
“Due to exceptional seasonal conditions the average micron of wool clips is trending between half to a full micron broader with higher Vegetable Matter than the previous season,” Mr Carr said.
“While this is impacting the price growers receive… they are making up for losses due to an increased fleece weight per head.”
This financial year, low prices for 16.5 and 18.5 micron had averaged 1563c/kg clean and 1497c/kg clean, with high levels trading at 2507c/kg and 2138c/kg respectively.
Prices for medium, 21m, and crossbred, 28m, wool tumbled with low range averaging 1331c/kg and 536c/kg clean, and high averages at 1543c/kg and 703c/kg respectively.
At time of publication, the Australian Wool Exchange Eastern Market Indicator rested at 1478c/kg clean, 16.4pc higher year-on-year.
“Australian sheep numbers are at their lowest since 1906 with Merino equating to less than half our flock,” Mr Carr said.
“We understand negligible stock of Merino wool fibre exists throughout the international textile pipeline providing a healthy platform going forward.
“Demand for our fibre into the new season will be determined over the coming months as major international textile companies meet to discuss fashion trends and subsequent decisions on wool fibre demand.”
Mr Carr, who has worked in major Australian wool export markets across Europe and Asia, said the market outlook was “exciting”.
His advice to woolgrowers to capitalise on the buoyed prices and improve marketing was to focus on “product, price and promotion”.
“Prepare your wool to the highest standard using a minimum AWEX standard code of practise guidelines and explore other leading Quality schemes that suit your wool category,” he said.
“Maximise the value of your product by managing selling costs and achieving a price that is in the upper end of the seasonal trading range.
“Engage a leading, independent and professional wool brokerage company to provide sound technical on farm advice and deliver your wool product to the global market.”
Based on marketing advice, several Karee Wool clients in Victoria and NSW held bales wool in store to target the second half of the season, when price reached record levels.
“Other clients have been proactive and achieved fantastic fixed priced forward contracts for the new season which protects them from a downturn in the market,” Mr Carr said.
- Australian Wool Testing Authority tested 23.5 per cent more bales in May compared with May 2016.
- The seasonal progressive comparisons for July 2016 – May 2017 compared with the same period last season reveal 4.5pc more bales and 4.8pc more weight tested for the season
- AWTA has tested 335 million kilograms this season compared with 319.5 mkg for the equivalent period last season