Buyers flock to wool with record prices for our fleece
AUSTRALIAN sheep farmers are confident restricted supply will underpin high wool prices for years to come as the fibre continued its stellar run in the last sales before the winter recess.
“It’s wonderful times,” said Robert McBride, a wool grower whose family company, AJ & PA McBride, is one of the largest wool producers in the world. The benchmark Eastern Market Indicator dipped back slightly from record highs of more than $20 a kilo to close at $19.81 a kilo on Friday.
That was a 31 per cent or $4.74 increase on last year’s July close of $15.07, according to the Australian Wool Innovation weekly price report.
The prices have been on a tear-away run hitting new records since March.
Mr McBride said flock sizes had reduced dramatically over the past 15 years and an extended drought in NSW and Queensland would further constrict supply. “While demand is increasing, we expect the supply squeeze for wool to continue for foreseeable years to come,” he said.
Sixth-generation sheep farmer Robert Ingram said the higher prices allowed farmers to invest in much-needed infrastructure such as fences, water supply equipment, machinery and IT communications.
“That improves your efficiency - you get more return per hectare,” he said. Australia’s chief commodities forecaster, The Australian Bureau of Agriculture, Resource Economics and Rural Sciences (ABARES), expects strong demand for superfine wool and slow supply growth to continue.
“In 2018-19 the value of total Australian wool exports is forecast to rise by nine per cent to $4.7 billion, supported by higher wool prices and increased export volumes,” the bureau said in its June quarter agricultural commodities report.