Symmetry aligns on European wool tour

When Fremantle-based wool trader and Swan Wool Processors managing director Paul Foley boarded a flight to visit European and UK wool clients in December, wool prices were diving, but on return they made a remarkable recovery, “a dollar up”.

“Before the rise and depending on who you talk to, the world was going to stop spinning,” he said.

While visiting with dozens of clients, the Australian wool market rebounded with the first two sales of the summer series resulting in the Eastern Market Indicator lifting 103 cents.

“You could put it down to China lifting COVID restrictions, the Europeans weren’t surprised by a rebounding market — they were expecting it,” Mr Foley said.

Australian Wool Exchange senior market analyst Lionel Plunkett said the Australian wool market finished the 2022 calendar year on the last series (December 13 to 15) positively on the back of support for Merino types.

“The EMI closed out the year 49 cents higher, adding to the previous week’s 54 cents increase, the rally pushing the benchmark indicator 103 cents higher — the best since 1979,” he said.

Mr Foley said the common theme on the minds of European clients was cautious optimism — because of the war in the Ukraine, higher energy prices, inflation and interest rates.

He said wool industry stakeholders were hoping energy prices were at a peak, but the war continued to be an unknown quantity with its drawn-out effect on world economies.

“Europe was bloody cold, minus five in some countries,” Mr Foley said.

“A cold northern hemisphere since forever has been good for the wool industry — wool retail sales numbers aren’t too bad, but still families have to be mindful with their discretionary spending.”

He said most people were optimistic about the wool industry, particularly regarding issues around sustainability, traceability and certification. “These elements are well received all around the world,” Mr Foley said.

“Most of our clients have their fingers on the pulse to what is happening in the Australian wool market and they only ever ask us for subtle changes for their raw wool orders,” he said.

“We visited many retail outlets — sales are up for heavy knits, which matches the current freezing climate and high energy costs.

“Not many people are getting into wool yesterday, they all have been in it for generations.”

Other than greeting clients, Mr Foley toured wool processing factories with his son Max, 27, who was on his first overseas business trip.

“We watched wool being processed and wool garments walking out the retail door,” Mr Foley said.

Max started working for Swan Wool Processors as a wool buyer in December 2019, joining the moderate-sized family-owned business that has traded in wool since 2007.

“The highlight of the trip was meeting all the people in the industry that my father has worked with for many years,” he said.

“I was also impressed by the skilled craftsmanship behind every link in the chain — from processing to end garment.

“It was freezing, everyone was wearing wool, and this gave me a new perspective and started me thinking about the possibilities for the industry.”

Mr Foley said several other Australian wool exporters were travelling in Europe at the same time because COVID restrictions in China were not permitting any visits there.

“I first went to Europe when I was 27 meeting the same people we visited on this trip — that was 27 years ago for a bit of symmetry and longevity of our involvement,” he said.

Paul and Max also caught up with Swan Wool Europe, the company’s UK office in Bradford which has been operating since 2009 and is managed by Andy Price, who looks after all the UK clients.

“Back in Perth, it was fantastic to step off the plane knowing wool prices had risen — it’s great for the grower,” Paul said.

“We will keep working during the recess, while also taking a well-deserved break to reflect on the past year.”