WEEKLY MARKET REPORT

Week Ending 9^th June, 2017

AWEX Northern Micron Indices Comparison 

AWI COMMIT MILLIONS TO WEB PORTAL

Not surprisingly, the Board of AWI announced this week to commit a further $3-$4 million to establish a wool exchange portal (WEP). What exactly is the WEP? Well we’re not exactly sure just yet. Maybe something like a Trivago for the wool industry, so described by the WEP working group chairman Will Wilson. Otherwise, from what we know, it’s a website that will contain information on selling options, compare selling charges, contain wool clip data and promote direct selling with processors. Born out of frustration a few years back (primarily by fine wool growers) the AWI Board decided to shoot the messenger and have committed substantial amounts of grower’s levies to duplicating much of what is already on offer.

They boldly predict this week that the WEP will generate savings of up to $38 million over 15 years. Not $38 million in one year but 15 years! According to respected wool industry analyst, Andrew Woods, that equates to $1.63 a bale or 1% of the current selling costs! As predicted, the auction system is seen as archaic and outdated and the “savings” will be garnered by direct sale. In our opinion this will play directly into the hands of the big Chinese players who, of course, would rather buy direct without having to compete. Our opposition to this doesn’t come from a threatened position. In fact, the WEP group have admitted they need brokers on board for logistics, testing and guaranteed payments (which the current systems deliver). Our opposition comes from this being poor use of grower levies which would serve growers much better being spent on the many good projects AWI currently have. I predict this one to be an expensive dud.

The market continued in the same vein as the previous 4 sales on the opening day, giving up more ground as losses extended their run to 8 days. However, the market made a welcome turn for the good on the final day as all microns added 15 to 30 cents to their overnight levels. Lots finer than 19 micron finished the week solid to buyers’ favour (15 cents) while 19.5 and broader posted good gains of 10 to 30 cents lifting 21s to 1505. The AWEX EMI rose 6 cents to 1478 while, in US$ terms, the lift was 27 cents, this due to the rapid rise in the A$ to 75.40 cents - a jump of over 1.5 cents for the week. Once again the better spec wools were in high demand as we sold a tidy 17.9 micron lot to Italy 150 cents higher than the indicator. Even with the market firming on the final day some discounts were still quite large for VM, colour and cott.

The skirting selection couldn’t follow the recovery of their fleece counterparts as losses over both selling days saw most types and descriptions peel off by 30 to 50 cents.  Cardings had another week as most types in this sector were left unchanged to sellers’ favour by 5 to 10 cents.  Macwool will offer 1095 bales on Thursday.

Ag Concepts Fwd Prices at 9 June 2017

 Main Buyers (This Week)