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TAS Country : May 31st 2012
Friday, June 1, 2012 Tasmanian Country 21 The Stock Report Don't panic over wool prices: Experts BRIAN CLANCY and FIONA MYERS 'People have short memories --- it is still a good wool market'---REX BENNETT WOOL prices have crash- ed, but experts say there is no need to panic. AWEX's Eastern Market Indicator fell another 17c/kg last week to close at 1104c/kg clean. It has fallen almost 50c/kg in the past fortnight and more than 100c/kg since early March. It is now trading 271c/kg down on the same time last year. Queensland Cotton wool exports boss Michael Avery said the fall was a reflection of global financi- al worries, particularly in Europe, and a dampening in demand. ''Wool, like all the com- modity and financial mar- kets, is being affected,'' Mr Avery said. Trade reports indicate the market isn't helped by a Chinese mill and an unnamed offshore Aust- ralian processor off- loading scoured and combed wool at below-cost- of-production rates. There are also reports many mills will begin to hold stocks. But Mr Avery was cau- tiously optimistic for the wool market and that prices might hold at cur- rent levels through the peak of the spring supplies. Mr Avery conceded the smaller offerings were helping cushion the falls. Last week, the national offering was only 33,273 bales, of which the trade bought 27,266 bales, with 18.1 per cent passed in. He said many Chinese buyers were confident of doing business at these levels. ''We could see a slight lift over the next few weeks, which could hold through into spring,'' he said. Industry trade consult- ant Dr Peter Morgan said the Eurozone financial un- certainties were definitely affecting the wool market. ''We are seeing that in the exchange rate,'' he said. ''A fall in the exchange rate is really a reflection of global concerns, which in turn affects retail de- mand.'' But despite 12 weeks of falling prices, the EMI av- erage of 1214c/kg was still above the 2010-11 average of 1143c/kg. Elders North East wool manager Rex Bennett said producers had been sur- prised by how quickly the wool market had dropped. He said some clients who passed in their wool at sales six weeks ago were now being offered even less. Mr Bennett said there was ''no writing on the wall to say the price will get dearer''. ''Unless you are selling 18.5 micron wool or finer, prices are still in the upper deciles in terms of his- tory,'' he said. ''People have short memories -- it is still a good wool market.'' Weekly Times Wool's yarn is worth telling ROGER HANSON ALISTAIR CALVERT: There is a need to engage with consumers by telling the story of Tasmanian wool. 'Tasmania is seen by many as the answer to New Zealand' ---ALISTAIR CALVERT A LEADING European retailer is planning to visit the state in the next six months to get a background on Tasmania's wool. Roberts Ltd state wool manager Alistair Calvert, who has just returned from a successful International Wool Textile Organisation (IWTO) conference in New York, said the retail sector was looking for a more defined source of raw material. The IWTO represents more than 200,000 commercial farms and several million small-hold farms worldwide, and more than 4000 wool and textile manufacturing companies. Ninety per cent of all fabrics containing wool are made in IWTO member countries. The conference also reinforced to him the value of social media in marketing Tasmanian Merino wool. ''The trend is to tell the story of the product, from which the retailer can explain to consumers the provenance of the material and how the product is sourced,'' Mr Calvert said. There seemed to be an underlying message through the whole conference of the need to engage with consumers by telling the story of the product. ''We need to do that in a smart way by using the many and varied social media applications,'' he said. ''The average 20-something American is exposed to 27 different mediums every hour of every day --- quite staggering really.'' Mr Calvert said there were many people looking to either further enhance, or at least start to engage with raw wool suppliers as a way of differentiating their value proposition from that of their competition. ''I believe we have a significant role to play in this, as Tasmania is seen by many as the answer to New Zealand,'' Mr Calvert said. ''To hear Stian from leading New York wool clothing retailer With & Wessel stand up and mention Tasmania was quite exciting for us.'' With & Wessel works with wool producers licensed by Woolmark, the top-quality assurance of wool standards in the world, to produce high-quality clothing. The Merino wool fabrics it uses are quality tested for stretch, peel and endurance by the strict standards of its fabric mills. Tassie in spotlight In another positive for Tasmania, major Japanese weaver Nikke has been promoting a Tasmanian line for the past two years. Mr Calvert said meetings at the IWTO conference confirmed Nikke's intention to grow this product line and also to source the majority of the material for the Aoyama ''Zero CO2'' program, now entering its third year, from Tasmanian producers. Nikke is a major supplier to Aoyama for this product line. Aoyama is a haven for Tokyo's youth, being one of the most popular entertainment and shopping districts in Tokyo and known for its fashion boutiques, large shopping malls and department stores, and multiple restaurants. ''It seems this year's conference was seen by many as the best one for quite some time,'' Mr Calvert said. ''Virtually the full circle was involved: growers, exporters, processors, manufacturers, designers (these had been lacking in the past) and retailers. ''I have found the conference to be great value, both from a networking point of view but also from an industry development perspective.'' However, he said the Chinese were talking the market down, stating a slowing domestic economy and also worldwide. ''They were very strong in saying that the current price doesn't work for their businesses and for longer- term sustainability there must be a correction in the short term,'' Mr Calvert said. ''Currently there is very little business being written, so we are likely to see the physical market continue to drift lower in the short term. Supply continues to tighten but, in my view, I think we are starting to see grower stocks building in stores around the country, particularly finer wool.'' Mr Calvert said reports about Europe were bad. ''It's extremely serious in the European market, maybe worse than the reports we are hearing,'' he said. ''On a more positive note, stocks around the world are low, therefore when there is a change to sentiment and people step back in to buy, it could push the market higher, similar to early 2011. ''The US is waiting and hoping for more good news from their employment data. '' At this stage, things are looking OK, but they really want three to four months in a row of good news before confidence and positive sentiment is restored.'' 2035638-120113 SELL YOUR WOOL AT AUCTION with We are able to o er a flat rate wool brokering service with regular o erings in Melbourne. 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May 24th 2012
June 7th 2012