Be­sieged wool boss hangs on to power

Tasmanian Country - - THE STOCK REPORT -

AS we move rapidly closer to­wards the Christ­mas re­cess, the idea of the high (Merino) wool mar­ket flush­ing any in­crease in vol­ume of wool onto the mar­ket is dis­ap­pear­ing.

At what is tra­di­tion­ally the high­est vol­ume pe­riod of the sea­son, this spring has de­liv­ered only two weeks where sales have been ros­tered over three days, with one more to come.

With the mar­ket touch­ing lev­els not seen for more than 30 years it would be safe to sug­gest there is vir­tu­ally no greasy stock sit­ting in stores or on farms around Aus­tralia.

Fur­ther to that, I was talk­ing with our South African friends this week and they too sug­gest stocks of un­sold or held wool are at record lows.

This sug­gests to me that prob­a­bly for the first time in more than 50 years we are ex­pe­ri­enc­ing a truly free mar­ket, with­out ei­ther mar­ket in­ter­ven­tion or the resid­ual of the same.

While all of this points to the prospect the wool mar­ket should con­tinue to trade along nicely for the fore­see­able fu­ture, the one thing that does not seem to get men­tioned is the sharp in­crease in the cost of yarn as a re­sult of the very high spot mar­ket.

As we know, the wool pipe­line is long and con­vo­luted and as a re­sult many man­u­fac­tur­ers, brands and re­tail­ers are only now start­ing to see the ef­fect on mar­gins of the cur­rent mar­ket. More likely it will be six months be­fore the im­pact flows all the way through.

It might be a case of out of sight out of mind, but I would sug­gest not. We should al­ways con­sider the fi­nal con­sumer as the cus­tomer and any push­back on re­tail price (as mar­gins are main­tained) will come as a head­wind for this mar­ket.

Of course this is only the case if de­mand re­mains stag­nant, but as we know wool is now play­ing a big­ger and more im­por­tant role in new mar­kets such as sports­wear.

So while it seems there is noth­ing to stop this mar­ket from con­tin­u­ing along from where it is, the whole pipe­line is yet to feel the true ef­fects. Only when it dows will we know if this is the new level.

The mar­ket looked a lit­tle “toppy” last week and even with the cheaper Australian dol­lar early sales this week sales saw most cat­e­gories drop 10c/kg to 15c/kg.

The ex­cep­tion was medium wool that seemed to hold on to last week’s level and cross­bred wool that con­tin­ued its choppy ride, los­ing 5 per cent in value.

If you have ques­tions or would like a par­tic­u­lar topic cov­ered send email to acalvert @robert­sltd. EM­BAT­TLED Australian Wool In­no­va­tion chair­man Wal Mer­ri­man has been “unan­i­mously” re-elected to head the grower-funded body.

Mr Mer­ri­man has been chair­man for nine years and was re­turned fol­low­ing AWI’s an­nual meet­ing last week.

His re­cent be­hav­iour has come under fire and prompted calls for him to re­sign.

The AGM heard an in­ter­nal re­view found Mr Mer­ri­man’s view­ing of an in­dus­try con­sul­ta­tive meet­ing with­out par­tic­i­pants’ knowl­edge and later swear­ing at a jour­nal­ist who ques­tioned him about the mat­ter had not breached the or­gan­i­sa­tion’s code of con­duct.

AWI has said Mr Mer­ri­man, other board mem­bers and se­nior executives should un­der­take train­ing in deal­ing with stake­hold­ers and me­dia.

Asked how his train­ing was pro­gress­ing, Mr Mer­ri­man quipped that “I haven’t been a very good pupil” but would “con­tinue with the ther­apy”.

Mr Mer­ri­man reaf­firmed his in­ten­tion to re­con­test his board po­si­tion in 2019.

In the board elec­tion, NSW wool grower and bro­ker Don Mac­don­ald was elected to one of three va­can­cies. Co­lette Garnsey and James Mor­gan were both re-elected but NSW wool grower Paul Cock­ing was not re­turned.

AWI had rec­om­mended votes for Ms Garnsey, Mr Mor­gan and for­mer AWI con­sul­tant Will Wil­son, who re­ceived the least num­ber of votes.

Mr Cock­ing re­ceived 128,608 votes, just 7284 be­hind Mr Mor­gan, prompt­ing claims Mr Mer­ri­man had used undi­rected chair­man prox­ies to un­seat Mr Cock­ing.

AWI de­clined to dis­close how many undi­rected prox­ies Mr Mer­ri­man used. He said the num­ber was “in line with nor­mal con­tested elec­tions, slightly up” and he did not be­lieve the vot­ing pro­ce­dure should be more trans­par­ent.

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