Wool exports hit by shipping chaos
COSTLY worldwide shipping issues are putting pressure on wool exporters with logistics leader AWH saying its wool stores, which handle 5060 per cent of the national clip, are staying close to full.
AWH’s Lara-based national wool manager, David Mitchell, said a raft of COVID-related issues were impacting heavily on the shipping industry, which was flowing to wool exporters who were struggling to secure vessel bookings or faced delays in getting to overseas markets.
The squeeze comes amid encouraging signs of recovery in the price of wool after the pandemic led to a fall in price as consumer demand dropped and global supply chains were disrupted.
Describing the shipping situation as a “basket case”, Mr Mitchell said the company was keeping a close eye on volumes at auction and hoped to see stock volumes at its 15 wool stores around the country ease in coming months.
“Most of our wool stores are pretty much full at the moment,” he said.
“But we certainly don’t want to have our wool stores full coming into the spring because then we will be forced to move wool around the network where capacity exists.
“We will be in a bit of bother potentially.”
After years in decline, the national wool supply is forecast to continue increasing gradually from 2021-22.
“We feel the production of wool is starting to bottom out now,” Mr Mitchell said.
“The Australian Wool Forecasting Committee are forecasting an increase in wool production next year on the back of the drought breaking in NSW and a big influx of sheep from WA coming east as well.”
AWH’s Lara wool store is one of its largest, but the national logistics and warehousing operation also stores cotton, dry bulk produce, such as soy meal, and urea at its 120,000sq m under roof warehouses in Forest Road.
Annual volumes vary but the facility usually turns over between 130,000 and 140,000 bales of wool a year.
The company’s general manager southern region, Greg Williamson, said the first loads of cotton were expected to arrive from NSW cotton gins this week.
“We are looking at putting about 50,000 to 60,000 bales through the site for the season,” Mr Williamson said,
He said that dry bulk was the biggest segment to be handled at Lara after wool.
“One of the sheds here is dedicated to (imported) soy meal,” Mr Williamson said. “We are currently sitting on about 40,000 tonnes of soy.”
Mostly arriving from South America, soybean meal mostly goes into animal feed stock.
Including contractors, the Lara site employs about 30 of AWH’s national workforce of about 350.