Wool centralisation call

The West Australian

WAFarmers has made a controversial call for the wool-selling system to be centralised in Melbourne.

In its submission to Australian Wool Innovation's independently commissioned Wool Selling Systems Review, WAFarmers said it made practical sense to centralise and amalgamate the existing selling centres at one primary selling centre, based in Melbourne.

WAFarmers said its submission was based on a declining national flock and wool clip, coupled with the declining number of sale lots presented through the Fremantle selling centre.

The farm lobby group said it was concerned with the duplication in the appraisal of wool for sale and queried whether it was necessary to have three groups look at a growers' wool.

"The savings made by buyers and brokers as a direct result of this consolidation must be passed back to wool producers," the WAFarmers submission said.

"We are aware that wool buyers are prepared to buy wool based on objective sale by description, ie sight unseen.

"However, opinions on this are divided and WAFarmers believes a sample should be sent to the primary selling centre at this point in time."

WAFarmers says wool bales should continue to be stored at the three existing wool selling centres around Australia. These bales could be sampled and tested.

The submission added that there was still the need for an intermediary to broker the sale.

It suggests shipping could then be arranged direct from storage to the purchasing country.

The WAFarmers submission notes that the majority of buyers are acting for Chinese groups, and that putting all eggs in the one basket was a dangerous concept.

"The key focus going forward must be to get more buyers at the primary wool selling centre buying wool for a number of countries, not just China, and for a range of markets," the submission said.

According to AWI, the objective of the WSSR is to improve the returns that wool growers receive.

The review aims to determine whether the current exchange of ownership between sellers and buyers provides the best possible competition and financial returns to primary wool producers.

The review explores whether the selling mechanisms, service providers and procedures that exist within the current route to market are helping to provide the best returns and improved sustainability for Australian wool producers and the industry.

All submissions to the WSSR are placed on the AWI website.

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