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Wool prices likely to stay high

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September 07, 2017

Aussie wool is a hot commodity again, reaping great rewards for growers on the back of surging demand, says Quality Wool managing director Mark Dyson.

Aussie wool is a hot commodity again, reaping great rewards for growers on the back of surging demand, says Quality Wool managing director Mark Dyson.

The 2016-17 season delivered growers the highest wool prices in recent history, a trend that is expected to be sustained in the short term at least.

Mr Dyson said a growing appetite for Australian wool from consumers had resulted in a positive trickle-down effect for growers.

‘‘The wool story, and in particular Merino, is a very positive one.

‘‘With the drive by consumers towards quality, natural products, demand has increased and the flow-on effect to our grower base is excellent returns.

‘‘We have a very loyal customer base who have been through trying conditions in the past 10 to 15 years, and those that have stuck with growing Merino wool are now reaping the benefits.

‘‘Demand is expected to remain buoyant, which should lead to good wool prices in the upcoming season.’’

In a sign of the current strength of wool prices, the Eastern Market Indicator recorded the highest yearly average on record for the 2016-17 season at 1406¢/kg, 151¢/kg above the average for the 2015-16 season.

The indicator finished at 1522¢/kg after the final sale in July, 16 per cent higher (or 211¢/kg) than 12 months earlier.

Mr Dyson said the combination of increased demand from overseas and a reduced supply of super-fine wool had created a perfect storm for prices to surge.

‘‘The sustained high wool prices that have been returned to growers is the real positive this season (2016-17),’’ he said.

‘‘We have had historically high Australian dollar denominated trading ranges for the 2016-17 season.

‘‘Demand has been a key driver with imports to China from Australia up 9.4 per cent for the 2016-17 season.

‘‘Merino stocks at the early-stage processing levels are also low, thus the increase in demand.’’

Quality Wool north-eastern Victoria representative Mark Amarant, who operates out of the company’s Benalla store, said now was a great time to be in wool, and growers could cash in fully on resurgent prices by devising a clear plan of attack for selling their clip.

‘‘We’re (Quality Wool) only too happy to sit down with growers and discuss a range of factors, from how they market their wool to their best options for selling it,’’ Mr Amarant said.

‘‘Your marketing strategy and when you sell your wool can really affect your returns as a grower, so that’s a personalised service that we pride ourselves on.’’

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