Sustainability scheme wool bound for new indicator

It comes after Cape Wools South Africa changed the way it does its market reporting in September, splitting the reports into Responsible Wool Standard certified and non-RWS certified indicators.

Now AWEX is undertaking a review to produce its own sustainability accreditation indicator.

AWEX market information manager Lionel Plunkett said they were currently looking at combining wools accredited through integrity schemes such as RWS, Authentico and SustainaWOOL into a new indicator.

""Up until now those volumes have been quite small but as we're moving along they seem to be increasing," he said.

"With RWS bales over the last few weeks you're looking at around 1000 bales nationally, compared to about 50,0000 bales overall.

"Once you include some of the other schemes those numbers do increase, you might be up around five to eight per cent, that's why we're going for the wider schemes to get some larger volumes into there as well.

"Of those schemes it will be the non-mulesed component in the indicator, because within sustainable you can be certified with pain relief but there's another level for the non-mulesed types and they're the ones that are getting the big premiums.

"We're looking to roll that out at the start of next season."

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Mr Plunkett said the premiums for wools through the various sustainability accreditation schemes weren't yet consistent.

"Some days and some types they might be 200c or more but you'll come back the next week and most of that may have evaporated because the two or three buyers who were competing on them may have filled their order," he said.

"It can be problematic for the current indicators because if you get a couple of those lots in the indicator or in one of the micron price guides and it's 200c above everything else, that will throw everything out.

"We do have the capacity to remove those on an individual lot basis, which is what we do at the moment

Wool analyst Andrew Woods from Independent Commodity Services has pointed out that in Australia the weekly proportion of merino wool accredited to RWS has ranged this season from one per cent to 6.7pc, compared to an average 27pc in South Africa.

"Without considering South America, which also supplies some RWS wool, there is obviously plenty of scope for supply to increase," he said.

"The large premiums being paid are very likely to encourage increased supply, with some resulting downward pressure on the premiums.

"In the meantime the South African market reports are a good guide to the strength of demand for RWS wool."

Fox & Lillie national brokerage manager Eamon Timms said demand for RWS wool within Australia had been more consistent over the past 12 to 18 months, although it was still a niche part of the market

"South Africa is garnering a bit more interest... because they don't have mulesing there's a much greater percentage of the clip there that's certified to RWS and it's probably meant more consistent price signals have been in that market than in our market," he said.

Mr Timms said RWS certified wool had grown to make up about 10 per cent of Fox & Lillie's business.

"A lot more people are looking at the concept of the plainer bodied breeding and it's certainly had more significance, a lot more people are talking about it than we've ever heard," he said.

Mr Timms said as the world comes out of the COVID-19 pandemic interest in certification schemes was only likely to increase as the focus returned to sustainability.

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