A MERGER of the Australian Wool Exchange (AWEX) and Australian Wool Testing Authority (AWTA) was among the recommendations made at the Australian Wool Innovation annual general meeting in Sydney last Friday.
The recommendation was made by Wool Selling System Review (WSSR) panel member, William Wilson, director of Australian Investor Relation Services.
He said the panel was due to deliver its report to the AWI board this month but would now deliver it in early December with growers to receive the report early next year.
However, Mr Wilson divulged some of the panel's proposals and recommendations they would make to AWI.
"We found that the current selling system is certainly not collapsed and totally broken, but it is in need of modernisation," he said
"The wool industry is yet to embrace electronic trading in the same way as other industries."
One of the key findings was further centralisation of wool selling centres.
"We feel a reduction down one centre would reduce infrastructure costs and it would provide more competition by bringing all liquidity together in one selling room," he said.
Broker charges were found to be less than transparent to those who were paying them, Mr Wilson said.
"The grower may not be charged directly but growers end up paying by receiving a lower price for their wool," he said.
Mr Wilson said the panel was surprised to see the lack of competition for wool testing in Australian had existed for so long.
"AWTA have done a very good job, but they have very little competition as they enjoy a tax free status - we have made a recommendation for them to not pay tax straight away but for them to put away the tax they might have paid in a fund for industry research and development," he said.
Mr Wilson said the panel felt now was also the right time for the case to be reopened for a merger of operations between AWEX and AWTA.
The major proposal put forward by the panel was for the introduction of a Wool Exchange Portal (WEP).
"It would not be a selling system in its own right but in fact a portal that sits above the existing selling systems and above current open cry auctions," Mr Wilson said.
"Basically it provides farmers, growers and other stakeholders with the ability to access information to evaluate all options that are available to them and with direct links, such if they find a a selling system that gives the transparency of the costs for getting their wool to market via a specific selling system they can actually transact.
"We feel that brokers are useful and necessary partner in getting this off the ground."
Mr Wilson said the WEP would allow buyers and growers to interact via private treaty.
"It would be a real time reporting of price information - very important for liquid future and forward markets."
As an online training tool it would also provide general market information and host a "find a broker" tool, a "find an exporter" tool and highlight market developments in Australia and internationally, Mr Wilson said.