According to prominent Uralla wool grower and stud breeder, Darryl Carter of “Whyworry Park”, the region’s wool industry looks set for a relatively good season – in terms of product but not pricing.
The Australian Wool Exchange Eastern Market Index (EMI) has fallen around 50c/kg in the past three weeks, more than 100c/kg since early March. Wool is trading over 270c/kg down on this time last year. Australia might be somewhat cushioned from the global finance market instabilities by the mining sector but wool, like most industries, is suffering from the tightening purse strings of international buyers. However, in historical terms, the wool market is still considered quite good. Despite over 12 consecutive weeks of falling prices, the EMI average of 1214c/kg remains above the 2010-11 average of 1143c/kg.
Mr Carter said early signs are indicating that the 2012 wool clip will be of a higher quality than last year. “We’ve had strong enquiries for our wool already. Last year’s sales were probably the best that we’ve ever had. We sold direct to Esprit. We met all of their requirements, including a condition that our sheep be non-mulesed. It was about 1000 cents above the floor for the premiums.”
“The wool industry is feeling some of the impact that Greece is having on Europe,” he said.
As with other export industries, particularly manufacturers, graziers are anxiously awaiting a drop in the Australian dollar. “When the dollar comes back down, we’ll get a more reasonable return,” Mr Carter said.
“We’d like to get the true credits for carbon from our wool. Over 70 percent of the wool is pure carbon and at this stage, the Federal Government doesn’t want to give us any credits for that.”
Mr Carter said that the ultra fine merino wool, around the 13 to 16 micron mark, has seen a considerable drop in demand. “A lot of work goes into achieving the really fine microns and at present, the premiums simply are not worth it,”he said. “The big demand is for the New England super fine average of about 17-18 micron.”
The challenge for wool growers (and farmers generally) is the growing costs of production. “Consumer and consequently, buyer demand for non-mulesing means even greater chemical costs to keep blow flies at bay. If prices can be more reflective of production costs then our wool industry will have a fine future,” Mr Carter said.
Story: Gary Fry
