Strong start to new wool season

Headshot of Bob Garnant
Bob GarnantCountryman
Techwool Trading western region wool buyer Russell Fraser backs higher wool prices and is proud to represent the largest buyer of Australian wool during the 2015/16 wool buying season.
Camera IconTechwool Trading western region wool buyer Russell Fraser backs higher wool prices and is proud to represent the largest buyer of Australian wool during the 2015/16 wool buying season. Credit: Bob Garnant

Wool prices reached new heights during the 2015/16 wool selling season, bringing much satisfaction to many woolgrowers, brokers and exporters throughout Australia.

At the top of the AWEX national buyers list was Melbourne-based Techwool Trading, which bought a total of 223,164 bales during 2015/16.

The company’s western region wool buyer Russell Fraser said it was fantastic to see the higher returns to growers.

“The all time high prices, which we hope will continue, also will help rejuvenate the wool industry in general,” he said.

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“Demand remains steady, but the ever shrinking supply of wool places pressure on prices and therefore good returns to growers.

“The exchange rate is also a contributing factor in the trade and during the year the Australian dollar has ranged favourably from 71.5 to 75.5 cents which compares to the 2014/15 season when the conversion was around 90 cents.”

Mr Fraser said while Techwool did not begin the season with a focus on being the largest wool buyer, it was always proud to make the list while continuing to encourage the wool industry.

The 2015-16 wool selling season finished with a record (Eastern Market Indicator average — 1254c/kg clean), and this strength was maintained in the first sale of the new season.

The Australian Wool Exchange senior market analyst Lionel Plunkett said last week’s EMI increase of 23 cents/kg was the best start to a season in 11 years.

“The increase comes on the back of rises during the preceding auctions, extending the rally to four weeks and pushing the EMI to a 12-month high (1320c/kg) and the Western Market indicator to 1423c/kg,” he said.

Mr Plunkett said the broader microns continued to be the focus and mostly carried the market higher.

“Last week’s two-day sale resulted in 21-microns jumping almost 50c/kg and now approaching 1500c/kg clean.”

He said in June 2015, the same micron category briefly hit 1500c/kg, but the record price of 1682c/kg was set back in 1988.

National Council of Wool Selling Brokers of Australia executive director Chris Wilcox said the open market wool prices had been rising steadily over the past six months, in both Australian and US dollars, but crossbred wool prices had been sliding.

Mr Wilcox said the 2015-16 EMI wool selling season average price exceeds the previous record set in 1987-88 of 1248c/kg clean.

Australian Wool Industries Secretariat executive director Peter Morgan said while the US exchange rate remained high, finishing last Thursday at 75.21 cents, the Australian dollar closed at 57.96c against the pound, an increase of 13.9 per cent since the Brexit vote to leave the EU.

Elders said last week’s market rise was because of concern about the low supply leading up to the three-week recess (weeks commencing July 18, 25 and August 1).

“Buyers scrambled to purchase enough quantity to keep machines running,” an Elders spokesman said.

“Stocks of greasy wooltop in China are reported to still be quite low and the Chinese domestic clip has yet to make an appearance at major processing mills.

“The more pressing question is where the market will be in September/October.”

Elders said traditionally the market followed a seasonal pattern and fell away about 10 per cent during August to mid-October.

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