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Wool prices rise as de­mand soars for our fine fi­bre

The Western Star - - RURALWEEKL­Y - CAS­SAN­DRA GLOVER Cas­san­[email protected]­ral­

WITH prices hit­ting record highs, it’s a very good time to be in the wool in­dus­try.

Prices have con­tin­ued to climb over the past few weeks with the Eastern Mar­ket In­di­ca­tor hit­ting 1983c/kg last week.

“We’re liv­ing in high ter­ri­tory,” said Scott Car­mody, trade con­sul­tant for AWI and com­mis­sioned wool buyer at auc­tion.

“We’ve never been here be­fore.

“There are some pock­ets of wool that have sold higher in the past, but as a whole we’ve never seen prices any­where near today’s prices.”

Mr Car­mody said there were a num­ber of fac­tors lead­ing to high wool prices in­clud­ing an in­creased de­mand from Europe and China.

“There’s a grow­ing de­mand in China. Pre­vi­ously most of the wool pro­cessed in China was be­ing ex­ported,” he said.

“But now about 60 per cent of it is con­sumed do­mes­ti­cally be­cause of the grow­ing mid­dle class in China.”

Mr Car­mody said there were some mi­nor con­cerns about the rapid price rise over the past few weeks.

“We need to hear back from the con­sumer,” he said.

“We need to wait and see if these prices are sus­tain­able.

“But if con­sumer de­mand stays the way it is and global pro­duc­tion re­mains as stag­nant as it is, if consumers want the prod­uct they’re go­ing to have to keep pay­ing for it.

“I’m not too con­cerned but it’s sort of in the back of your mind, and a lot of wool grow­ers are that way as well.

“I think the de­mand is re­ally over­pow­er­ing sup­ply vol­umes at the mo­ment, which is driv­ing that price.

“But I’d like to see some con­sumer lev­els be­fore you start pre­dict­ing years of these prices.”

Mark Mur­phy from Kar­bul­lah Merino Stud, is set to reap the ben­e­fits of the cur­rent wool prices as he pre­pares to sell his wool this week.

“We’ve got all the wool now and we’ll be sell­ing it this week,” he said.

“We haven’t got our val­u­a­tion yet but the mar­ket is fan­tas­tic.

“The EMI is at record prices, but un­til you ac­tu­ally sell some wool in re­gards to your own coun­try and your own wool I think most peo­ple are in un­charted ter­ri­tory.

“But it’s a very nice time to be in meri­nos.”

Mr Mur­phy has just fin­ished shear­ing 3500 meri­nos.

“The shear­ing went pretty good,” he said.

“It’s dry so we had no hold-ups.

“We’ve got a few more to do. We bought a few sheep from up north that don’t have quite enough length on them yet. We’re pa­tiently wait­ing to shear them next month. It will be about 4000 by the end.”

Mr Mur­phy said he was sym­pa­thetic to­wards those wool grow­ers who were suf­fer­ing be­cause of the dry sea­son.

“For any­one who has had

❝But it’s a very nice time to be in meri­nos. — Mark Mur­phy

low rain­fall and a poor sea­son, it is a bit sad. Un­for­tu­nately the sea­son is mak­ing it tough for some peo­ple to get the most out of the mar­ket,” he said.

“But I think the mar­ket will con­tinue like this for a few years yet.

“There’s plenty of fenc­ing hap­pen­ing and plenty of light at the end of the tun­nel.”

Aus­tralian Wool Net­work South­ern Queens­land sheep and wool spe­cial­ist, Stephen Maun­der, has just re­turned from China with an op­ti­mistic out­look for Aus­tralian wool.

“They (spin­ners and top mak­ers in China) want as much wool as we can pro­duce. They want to know when we can pro­duce more sheep,” he said.

“They are very in­ter­ested in do­ing five-year con­tracts with pro­duc­ers, di­rect mar­ket to the mills.

“They want to make the mar­ket more sta­ble. They don’t like the rise and falls in the mar­ket. So they can bud­get eas­ier, just like pro­duc­ers do.

“In the short to medium term China was very pos­i­tive

about these prices.”

Mr Maun­der said most of China’s wool in­take would be for their do­mes­tic mar­ket.

“At the mo­ment 52 per cent of what they process is used in­ter­nally but in the com­ing years they want to take it up to 80 to 85 per cent.


MERRY MERI­NOS: Luke Mur­phy and his part­ner Sarah with Vicki and Mark Mur­phy.


WORK­ING HARD: Bren­dan Zappa shears at Kar­bul­lah Meri­nos, a prop­erty reap­ing the re­wards of record high prices.

Dave Fer­gu­son shear­ing a sheep at Kar­bul­lah Merino stud.

Luke Mur­phy work­ing hard dur­ing shear­ing time at Kar­bul­lah Meri­nos.

A graph from AWI show­ing the five-year AWEX EMI monthly av­er­age as at the end of April 2018.

Merino wool about to be shorn at Kar­bul­lah Merino Stud.

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