Wool sale review findings slated

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Bob GarnantThe West Australian
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Recent submissions to the Wool Selling Systems Review panel have questioned the lack of detail in its findings.

Commissioned by Australian Wool Innovation, the WSSR was initiated to improve the returns woolgrowers receive for their product.

First submissions were finalised in February, pre-empting a discussion paper that was a hot topic among WA wool brokers and exporters.

Westcoast Wools director Luke Grant said the main initial finding of the review was a proposal to set up a Wool Exchange Portal, which included only two new selling options, with all other options named already in use.

Mr Grant said the on-farm guidance test option to offer wool over the internet failed as it had testing inaccuracies and would be labour-intensive, while the online auction with Chinese participation had been tried and was a failure.

Many leading industry participants, although willing supporters of the review, poked holes in the discussion paper in the lead-up to the July workshop in Melbourne, which was closed to the media.

Many participants were outraged, with several stating that what was reported from the separate media conference did not define the true messages from the actual workshop.

This indiscretion became evident in the second submission, with some contributors slamming the review panel for failing in attention to detail.

WA-based PJ Morris Wools director Peter Morris said the panel seemed to have a lack of understanding on how intricate the wool industry was.

"The panel needs to listen and engage industry professionals to fully understand what they are suggesting in the WSSR," he said.

Mr Morris said he was disappointed with the workshop and its absence of offering informal discussions with the panel.

He suggested that the panel consider having meetings with growers and industry bodies at various strategic locations to develop a clear understanding of the issues.

Also detrimental to the review was an accusation that AWI was ill-informed during the review process.

AWI chief executive Stuart McCullough was reported as saying there had been no modernisation in the present auction system in 100 years.

"It makes no sense that 95 per cent of Australia's wool is marketed through the open cry," he said.

Mr Morris said it was astounding AWI had so aggressively stated there had been no material change in the selling of wool over that time.

The Australian Council of Wool Exporters and Processors, the Inland Woolbrokers Association and the National Council of Wool Selling Brokers of Australia stated they did not believe due process such as that outlined in the WSSR 2014 issue paper was being followed, and a successful outcome was in jeopardy.

ACWEP president Chris Kelly also criticised AWI, saying there were several examples of the modernisation of the wool auction system including sale-by-sample and pre-sale testing.

"None of the other selling technologies developed to date have demonstrated the ability to extract the same level of competition while selling more than 250 lots an hour with instantaneous price discovery to attract the necessary buyer and seller confidence," he said.

In regards to the WSSR panel's recommendations of a sale-by-description, Mr Kelly said the method had been trialled briefly, but it was well known wool buyers regarded inspection of the sample a critical part of the valuing process.

With the WSSR's intentions of improving returns to the farm gate, National Council of Wool Selling Brokers of Australia executive director Chris Wilcox suggested the review panel go outside the terms of reference and investigate the cost of wool harvesting (62 per cent of total cost) and AWI's levy, which he said was a significant impost on woolgrowers.

According to G Schneider Australia, improving the quality of Australian wool was the first thing to do when seeking a better price.

"Too many grower submissions were focused on reducing standards in order to improve returns," a spokesman said.

AWEX chief executive Mark Grave said the WSSR panel's concept of the WEP needed clarity as to the potential benefits to woolgrowers.

According to Techwool Trading, direct selling on-farm would increase the industry costs and inefficiencies. "No thought has been given to aspects such as on-farm storage, accurate certified test specifications, certified weights and transport logistics," a spokesman said.

"Perhaps one of the biggest omissions to the WSSR is that of industry finance - the most intricate and important factors of our industry today."

Final submissions to the WSSR panel closed on September 4.

The panel's final document will be released to AWI and industry towards the end of the year.

The discussion paper is available at wool.com/wsst.

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