Wool price slide continues as demand languishes

Even the faith of “true believers” in the wool industry is being tested with week-on-week price falls turning some hardened growers away from Merinos.

A key wool industry leader is calling for urgent action to try to turn around the falling fortunes of growers or more will be lost to the industry.

Wool Producers Australia president Steve Harrison said this year’s price slide was already turning some of the most hardened growers away from Merinos as returns fail to cover costs of production.

“I don’t think some growers really realise just how bad the prices are at the moment,” Mr Harrison said.

“We sold 18.5 micron wool last week, and it had all the bells and whistles and we got 1100c/kg.

“The gap is narrowing between fine wools and medium wools (less premium for fine wools) and even between fleece lines and pieces.”

Mr Harrison said the recent price falls this year were “even testing the true believers”.

“I spoke with three wool growers and all had gone out and bought crossbreds or shedders (sheep which shed their wool) last week,” he said.

“It is not possible to make money out of wool at these rates, which are probably what we were getting 18 to 20 years ago, yet the costs are still going up.”

Mr Harrison said it was time for marketing to look at other methods as the current promotions programs had failed to generate demand.

“Wool is just 0.6 per cent of the apparel market – essentially that means there is no demand for wool and I can’t see how we can improve this in the short term,” he said.

“It should be wool’s time to shine – it ticks all the boxes for what the world says it wants as it’s renewable and sustainable, yet we are languishing with low prices.”

Giffard West wool producer Steve Harrison helps skirt the fleeces.

Mr Harrison said the Campaign for Wool a decade ago, which featured the then Prince Charles, had played a role, but a new famous advocate was needed to spur demand.

Mr Harrison’s comments come as the benchmark Eastern Market Indicator lost another 6c/kg last week to close at 1157c/kg clean.

The 18-micron indicator fell 37c/kg and the 17-micron indicator slid 23c/kg to be the worst performing of all categories.

In its analysis of the market, Australian Wool Innovation said demand was lethargic and was due to the absence of some Chinese customers of raw wool, who took off time to celebrate their New Year period.

“One or two important auction operators failed to even place orders into the market, as they wished to rest their staff,” the AWI analysis said.

“Given the subsequent auction results, the market held on rather well as other mainly locally based buyers stepped up their purchases.”

Of the 40,472 bales offered, 9.5 per cent was passed in.

This week’s wool auctions include 4500 bales of New Zealand wool, with a total of 39,500 bales to be offered.