Wool growers heed cries to reduce supply

Wool growers heed cries to reduce supply

A total of 25,000 bales were sold last week and all Merino fleece categories finished higher.

A total of 25,000 bales were sold last week and all Merino fleece categories finished higher.


A total of 25,000 bales were sold last week and all Merino fleece categories finished higher.


With a better balance between supply and demand achieved last week, the market was able to pick itself up off the floor and regain a positive perspective on life.

A bit like many situations around the globe at present when things appear to be heading to the abyss, a show of positive sentiment and thoughtfulness is enough to turn things around.

The wool market has a habit of surprising most people, just as soon as they think they have it worked out, the volatility amps up again and it makes a mockery of all the careful planning and strategy.

However, it does seem that either by design or simple luck the growing fraternity heeded the cry for help of the downstream sector not to keep drowning them in unwanted supply.

A total of 25,000 bales were sold last week and all Merino fleece categories finished higher.

Crossbreds, and there is a plethora of them in stores at the moment, were a bit off but nobody from the grower side would be complaining about the lamb prices doing what they are.

Cardings were a little mixed, which is understandable given the point of the season and the background events the market is battling through.

So, with some brokers clearly asking their clients to consider the intelligence of offering wool if reserves were out of reach, or if there was simply not a lot of demand for their particular wools at the moment, and some others clearly having cleaned out their sheds, the volume of wool sans every other global supply base, was pretty much in tune with the volume of demand out there at present.

The overseas buyers and processors breathed a collective sigh of relief and mostly stepped back into the ring again.

This week sees a small one-day sale with around 20,000 bales currently rostered which were, in theory, going to be sold the following week anyway.

South Africa rejoins the fray on April 22, with essential service status being bestowed upon their wool trade as well, so hopefully the balance can be maintained.

The industry may have just collectively dodged a bullet, by not totally ignoring the customers further up the chain.

If such communication does work from time to time - and no, it is not collusion before the nay-sayers get on their high horses - but these market signals if heeded, can prevent the price, and indeed the industry heading off a cliff.

To ignore what is happening in the life of the actual customers, is foolish and short-sighted indeed.

A customer is normally defined as being one who purchases the goods you are seeking to sell, however, to quote the late Michael Lempriere "nobody has sold any wool until someone buys a sweater", alluding to the concept that a wool grower has the ultimate customer of that person at retail to consider, as well as all of the intertwined customers at every stage of the processing chain.

It does go both ways however, and the total disregard for supplier's livelihood by some of the large corporate retailers has been astonishing.

Rather than communicating their current position and talking cooperatively about what can be done, some large chains have just slammed the door.

They are refusing to take goods that were on the way, leaving the supplier to return them to the warehouse, often at considerable cost, and wait for more information.

Obviously not all retail operations are like this, and perhaps those who act inappropriately now will receive some retribution further down the track, and those who work cooperatively will find their supply chains intact when the situation returns to the new normal, whenever that may be and whatever that may look like.

It is not difficult to see that those organisations seeking more and in turn offering more than a simple transaction, are predominantly the ones who are prepared to do more work now to assist the supply chain to endure.

Companies, brands and retailers who have invested in provenance, quality and supply chain linkages in the true sense of the word are those still talking to their suppliers, whilst others have just cut-and-run in a fast fashion sort of way.

So those with a relationship, no matter how deep along the chain it transcends, will at least know when the light starts shining again - as it will.

Wool, after all, is not a perishable commodity, not that we want to build another bloody stockpile either.

And the consumer base is still only 1.3 per cent of the apparel market place, and arguably mostly at the top end.

There are plenty of real-life examples of people wanting to feel good about themselves in times of trouble.

As Georgina Safe mentioned in her article in the Financial Review last weekend Emily Nolan is a fashion designer pushing the right buttons and understands there is still going to be a place for both ready-to-wear and also made-to-measure, but overall people will want to feel safe and secure, and that high-quality clothing can provide that armour.

Women more so than men will make conscious decisions about what is in their wardrobe and how it makes them feel.

So, whilst for the last 200 years the wool industry has been broadly focused on making men's suits, the next period of time may well see a much different gender focus.

Uniform orders from the Chinese government, for both genders are something that many in the trade are yearning to see, and no doubt will be forthcoming at some point.

However, despite the incredibly large numbers of government workers who have uniforms supplied in China, like the traditional businessman who is now wearing more casual clothing rather than a suit (especially when working from home) the future of wool consumption will not be these sectors.

There has been a gradual swing away from the traditional use of wool, and the pandemic may hasten the move, but nothing is more certain than that the 'new normal' will see us doing things differently than in the past, and this will provide some fantastic opportunities for those who dare.

The story Wool growers heed cries to reduce supply first appeared on Farm Online.


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