Why broad wools are taking a hammering in the price stakes

It has been a long haul for broad wool prices, with shearing costs eclipsing the fibre’s value. Analysis shows what rates will do next.

Crossbred wool prices continue to disappoint producers as they face shearing costs that outweigh the value of fibre cut.

And in a stunning reflection of the lack of demand for broad wools, they account for almost 20 per cent of the total volume but less than 5 per cent of the value of wool sales.

Prices at the beginning of last month were sitting at some of their lowest levels for years, as increased volume and decreasing demand take their toll.

Australian Wool Innovation chief executive John Roberts said its marketing program was for all microns, including broader wools.

Oversupply and weak demand for crossbred wool has pushed prices to some of their lowest levels in years.

“The 10-year strategy for Australian wool growers (Wool 2030) … includes activities to develop new products for wools of all microns,” Mr Roberts said.

“I provide you with my assurance that AWI … will continue to operate for the benefit of all wool growers and continue to deliver results for all wool growers.”

Mr Roberts said some growers had held crossbred wool back, hoping for better returns.

“Holding costs and no light at the end of the tunnel has seen a change in sentiment in regard to holding wool, and a much higher percentage is being sold rather than passed in than in previous years,” he said.

“There is still a very high volume of stocks held globally of these broader wools … from yarn back to greasy (wool) held in store and even on farm.”

Mr Roberts said the poor prices for broad wool had not been restricted to Australia but had been a global phenomenon seen in other wool-producing nations across the world. This included New Zealand, which grows about 100 million kilograms of broad wool compared to 65 million kilograms in Australia.

Southern sales continue to show the greatest offering of crossbred wool, with up to 27 per cent of the amount offered at a recent sale classed as non-Merino.

In auctions held the same week, the north (Sydney) had a 22 per cent non-Merino offering while in Western Australia (Fremantle) it was as low as 6 per cent according to figures supplied by the Australian Wool Exchange.

The amount of broad wool in the national clip slipped to 11 per cent in September 2018 and peaked at 28 per cent in December the same year.

But in the past 12 months, non-Merino wool has comprised 18-25 per cent of the bales sold.

Fox and Lillie national brokerage manager Eamon Timms said sales in recent weeks had seen Merino fleece wool make up about 50 per cent of the offerings.

“The volume of crossbreds on market was 25 per cent of the national offering two weeks ago with the balance comprised of Merino skirtings and Merino cardings and crossbred cardings, and last week’s breakdown was very similar,” Mr Timms said.

“Crossbred types continue to step slightly lower as demand fails to keep up with the significant supply in the market.”