Demand for WA wool ‘very, very good’ with EMI at season high in week 50 of the selling season

Competition in WA’s wool buying centre heated up last week as the stock market’s ripple effects on the Australian dollar made the luxury fibre more affordable, leading to “extraordinary sale results”. Demand for the luxury fibre has surged back to pre-pandemic levels as the world emerges from COVID-19 lockdowns ready to shop and China’s woolen mills fire back up. Endeavor Wool Exports trading manager Josh Lamb — who visited the Bibra Lake wool stores on Wednesday from Melbourne — said despite the fibre “suffering” in 2020, it had bounced back with force. “I think we got we got slammed a bit harder in 2020 than other fibres such as cotton or synthetics,” he said. “But I think we’ve made a pretty healthy recovery... and stormed straight back into it. “Demand around the world is probably as good as it’s been for maybe 10 or 12 years.” The Fremantle site was abuzz for week 50 of the selling season, with demand for all types strong as the Australian dollar dropped 1.5¢ off the back of stock market plunging earlier in the week. Elders wool sale manager north Tim Burgess was all smiles, saying it had resulted in good demand “across the board” for all wool types, with interest stemming from western Europe and China. “That’s made wool more affordable, so there was great competition on all wools,” he said. “It was definitely up on the last couple of weeks, which is excellent. “They just wanted to buy everything available,” he laughed. “Hopefully that’ll continue.” The Eastern Market Indicator closed the week at a season high, jumping 29¢ to 1467¢. According to Australian Wool Innovation, prices within the merino fleece and skirtings “escalated substantially” from the opening lots sold, with some individual sale lots returning more than 100¢ above last week. Wool growers have been grappling with wool rot and quality issues after several farming areas in the east hit hard by flooding in 2021 and more than 500mm fell in some areas of NSW earlier this year. Mr Lamb said the impact of the rain was the worst he had seen in more than a decade. It has seen interest turn to WA’s offerings, which Mr Lamb — who was visiting the State for an Australian Wool Testing Authority board meeting — said had become “very important”. “You can see that in the market,” he said. “For a lot of years there was always a bit of a bit of a discount with WA, but more and more you see that they’re either the same level or pretty close to it or even at times above.” While things are appearing more rosy, the industry is not yet rid of its pandemic-induced logistical challenges. “Originally in 2020, the problem was vessels stopped coming to Australia,” Mr Lamb said. “The problem we’ve got now is with the dumps and the service providers who pack the wool — they can’t cope with the amount of wool that’s coming in. “One vessel delay falls back and one of the dumping houses will be left with 10,000 bales of wool for the week and the next week they’ve got to do the same thing. “They just don’t have the room to hold the wool.” He called it the “biggest problem” they were tackling. “Service providers aren’t set up to store wool; they’re set up to receive wool, then 48 hours later it’s out the door,” Mr Lamb said. “That’s where the problem is at the moment — they just can’t clear that backlog.” Transit times from Australia to China from the east coast have remained relatively stable at 15-18 days, but transit to other wool buying nations including Europe and India had doubled. “They’ve gone from as little as 30-35 days to as much as 60-70 days,” Mr Lamb said. “And at the Australian end before you get to the vessel, that’s gone from a couple of weeks to four or five weeks. So the window is essentially four or five weeks to three months.”