Lempriere's trader is leaving his mark

After an absence of about eight years, the Melbourne-based international wool trader since 1857 - under the stewardship of a fifth generation of the Lempriere family - has its own man in the west.

In an unusual move, viewed as an authoritative tick for the on-going strength and resilience of WA wool growers and the Western Wool Centre (WWC), Lempriere moved its trading division manager Evan Croake to Perth.

He has been supervising from Perth, Lempriere's buying at the Sydney and Melbourne Australian Wool Exchange (AWEX) auction centres for the past two months.

His arrival in Perth coincided with a volatile period of trading.

Initially a supply shortage maintained higher prices, but with new season's wool coming onto the market and supply concerns easing, prices started sliding.

Growers are wary and withdrawing lots at the last minute if they suspect the WWC market might take a tumble, while the percentage of wool passed-in because it failed to reach optimistic reserve prices set by growers and brokers has increased significantly.

Mr Croake, while describing trading conditions as "very difficult", has taken this in his stride.

Since he first took his front-and-centre seat in the fleece auction room at the WWC, Lempriere's name has appeared regularly near the top of the AWEX wool buyer lists.

Prior to Mr Croake's arrival, Lempriere used a contract buyer to bid on its behalf, but the company name only appeared intermittently in a list of the top seven buyers at the WWC, and then usually in seventh place.

In the past 12 sale days of the previous selling season at the WWC, including the period where wool prices climbed to their highest in four years and the Western Indicator set a record, Lempriere significantly increased the amount of wool it bought.

There were only two sale days where it was not amongst the top seven buyers and, according to AWEX figures, Lempriere purchased a total of 3326 bales at the WWC, or 14 per cent of its total purchases across the three auction centres.

To put that into proper perspective, while there were 12 sale days at the WWC from week 43 to week 52, there were 20 at each of the Sydney and Melbourne centres where Lempriere was also bidding.

In the first 12 sale days this season - to week 15 on Wednesday last week - both the percentage of wool and the number of bales bought by Lempriere at the WWC jumped further.

Its percentage of wool bought in the west is up to 20pc and rising, particularly since Mr Croake took his seat at the WWC in week nine.

It has purchased 6910 bales at the WWC out of a total of 33,866 across the three centres, and there were 24 sale days in that period in both Sydney and Melbourne.

On recent WWC sale days, Lempriere has rivalled Chinatex, the biggest wool buyer in Australia, for top spot on the buyers' list.

On Wednesday last week, Lempriere purchased 922 or 13.8pc of the 6705 bales sold, second to Chinatex which bought 1103 bales or 16.4pc.

The Wednesday before Lempriere easily topped the WWC buyers list.

So far this season at the WWC, Lempriere has bought 9.8pc of the 70,563 bales sold, just ahead of Chinese buyer Tianyu in third place and newcomer Global Wool Export in fourth.

Chinatex, however, remains clear leader, having taken 16.2pc of the offering.

"With me based here now, part of our focus is on the west and we are definitely buying more wool out of here as a result," Mr Croake said last week after the close of trade at the WWC.

"It is definitely a lot easier when you've got your own staff on the ground and you can do more with the different wool types.

"I also look after the trading of the wool, so it gives us a bit more variety in terms of wool types.

"I'm buying and trading out of Perth, whereas in the past we were more looking to buy wool and bring it back to the east," he said.

"Really, with a company of Lempriere's size we need to be able to ensure supply to all of our clients, so we looked at it and decided we should have our own staff at the three selling centres so we can source wool from anywhere.

"We're definitely here to stay - personally, I'm definitely here for at least two years and when I go back east a Lempriere office will remain here.

"The type of wool produced here is very suitable for China and it really suits a lot of our clients."

Born into a superfine Merino wool-growing family at Pyramul, near Mudgee in central New South Wales, Mr Croake decided to "try the other side" of the wool industry.

He has worked for Lempriere for eight years, the past three as its trading division manager.

Mr Croake recently returned from several weeks in China, including attending the three-day Nanjing Wool Market international trade fair and information conference with almost 500 other delegates from 26 countries.

Based on what he heard in China he predicted the "difficult trading conditions at present" are likely to continue until later this year.

"Generally speaking, things in China are quite slow,'' he said.

"Demand is very sporadic and every mill has a different story.

"There are some big issues surrounding finance up there, and access to finance.

"As we come into the bulk of the season that is likely to exacerbate the problem - because there is more wool available that means more cash is needed to buy it.

"Unfortunately there is not a strong demand in China for fine wool, whereas in Europe we are starting to see some improvement for better specification wools.

"But a big issue at the moment, particularly here in the west, is that there's a lot of over-long high-CVH (a measure of likely fibre breakage during processing) wools.

"They are getting quite heavily discounted.

"There is a market for these wools on China but it's got to be heavily discounted."

Mr Croake said demand for worsted "products" was still very poor.

"There is more restriction on government spending which means there is unlikely to be any new uniform contracts, which is obviously one of the big components of and a big driver of Merino fleece prices," he said.

Demand for knitwear and next-to-the skin sportswear continued, if not quite as strongly as last season, but was not yet outstripping supply, he said.

"We are going to see prices for auction room two types - pieces, bellies, oddments and the shorter wools - continue to be strong, but fleece is going to continue to struggle," Mr Croake said.

The decline in value of the Australian dollar against the US dollar - China buys wool in US dollars - meant Australian wools were now at prices "where the orders should start to flow", Mr Croake said.

However, it was "a bit too early" for those orders to hit the system, he said.

Another hope for later in the year was the expectation the woollen double-faced coat fashion phenomenon, which drove wool prices last season, would return.

"Last year was incredible and we are expecting big things from it again this season, but it's a little bit too early,'' he said.

"Closer to December or January is when the mills will start to look at it for next winter.

"Hopefully, this may mean we might actually see a bit of a rebound later in the year."

While China remained the clear primary focus, India was taking more Australian wool this season than it did last year and the European market was "not shrinking", so there were some positive signs, Mr Croake said.

"Basically, it doesn't matter what city you are in, we'd all like to see better prices and more wool, but it (his move to Perth) has worked quite well for us so far."