Hype aside, mar­ket gains add up nicely

Tasmanian Country - - THE STOCK REPORT - Alis­tair Calvert

THERE have now been four sell­ing weeks since the midyear re­cess and dur­ing that time the wool mar­ket could be de­scribed as a roller­coaster.

Over the past few weeks we have seen in­creased re­port­ing on the highs of the wool mar­ket, thanks in part to SOME mi­cron types sur­pass­ing price lev­els pre­vi­ously seen dur­ing the last wool boom in the late 1980’s.

Those who re­main com­mit­ted to the in­dus­try know that this is re­ally only one side of the story; while the price be­ing re­ceived at the mo­ment is a stark im­prove­ment on where we have been for a long time, not much is men­tioned about the in­creased cost of pro­duc­ing one kilo­gram of wool.

As is the case with any hype cre­ated around an in­dus­try, it doesn’t al­ways tell the whole story.

Back to the mar­ket, and part of the rea­son I men­tion the past four weeks in sales is so we can look at things with a lit­tle per­spec­tive.

On the first day of sell­ing this week we saw the mar­ket con­tinue to fol­low the di­rec­tion of last week, losing 20 cents to 30 cents across most cat­e­gories for the day in Melbourne.

In­ter­est­ingly, when we look at Syd­ney on the same day, su­perfine types were 40c dearer. This says more about the qual­ity of the wool on of­fer, with Syd­ney tra­di­tion­ally hav­ing a larger pro­por­tion of high­spec su­perfine types.

Fre­man­tle had the week off last week so un­for­tu­nately the West had some losses to catch up on and ended up losing 100c to 120c for the day.

In eight sell­ing days up un­til Wed­nes­day this week some of the ac­cu­mu­lated move­ments per mi­cron price guide read like this: the 17-mi­cron cat­e­gory is up 86c, 18 mi­cron up 60c, 19 mi­cron down 16c, 21 mi­cron is up 38c, 28 mi­cron up 87c and 32 mi­cron up 39c.

So while the past cou­ple of weeks have been dis­ap­point­ing, had we pre­dicted a 4 per cent gain for su­perfine lots and an 11 per cent gain for 28 mi­cron, I think most peo­ple would have been happy.

Chang­ing tack slightly, I see the role of a wool bro­ker as some­one who can de­liver mar­ket in­for­ma­tion (among other things) in a timely, unedited fash­ion to cus­tomers.

One topic that has been avoided to a point is mulesing and all that sur­rounds it. Not want­ing to dis­cuss the ben­e­fits of mulesing, that is a de­ci­sion for in­di­vid­ual farm­ers, but look­ing at how the mar­ket views wool de­clared as non­mulesed or ceased mulesing, we have re­cently done anal­y­sis to help de­ter­mine what, if any, the price pre­mium might be.

Look­ing closely at a Tas­ma­nian clip sold last week and com­par­ing that to the over­all mar­ket for the week, the price pre­mium was sig­nif­i­cant. I am not go­ing to sug­gest this will be the case go­ing for­ward, but right now there are a num­ber of ex­porters and top-mak­ers look­ing to pro­cure com­mer­cial quan­ti­ties of th­ese wools.

Next week there are 43,000 bales ros­tered na­tion­ally with 39,000 the fol­low­ing week.

For any ques­tions or com­ments send email to acalvert @robert­sltd. com.au.

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