Difficult market outlook for wool continues

Farmer-to-merchant wool trading is set to kick into gear in the coming weeks, as shearing will commence on sheep farms across the country. However – like last year – the outlook for prices remains difficult.

Although prices have yet to be set in stone, no great changes are expected from last year’s returns and prices of 50-55c/kg have been muted for lowland wool.

Although pretty much on a par with this time in 2017, the prices are down significantly on the prices achieved during 2016 and 2015. Back in 2016, €1.00/kg was common place, while it was a further 30c/kg higher at €1.30c/kg in 2015.

Speaking to AgriLand, Kevin Dooley of Dooley Wool Merchants said: “It’s very hard to sell wool at the minute. Buyers from China are not sourcing wool from Europe.

Our wool is being sold into the UK for washing where it’s then sold on for textile and carpet production.

Kevin also highlighted that there has been no great increase in supplies just yet this year – despite the fine weather that braced many parts of the country last weekend.

“Farmers have been slow to shear this year, as conditions have been less than ideal. They don’t want to put ewes rearing lambs under stress if the weather was to get cold again.

“It’s been a tough winter and farmers are holding out for warmer temperatures before shearing,” he said.

An online trading platform

In other wool related news, industry partners in New Zealand have come together to develop and launch an independent online wool trading platform.

Modelled on the Global Dairy Trade (GDT) platform, the Natural Fibre Exchange (NFX) is scheduled to go live with its first trading event on May 22. It has already received a commitment of 6.5 million kilograms for the first 12 months.

Wools of New Zealand chief executive and NFX spokesperson Rosstan Mazet said: “The NFX draws on international models as an open access, independent trading platform and represents a cross section of the wool market.

There are a number of in-built features to the platform that ensure the NFX is pro-competitive, transparent and encourages fair discovery of prices for the fibre products traded between buyers and sellers.

“Online trading is playing an increasingly important role in international commodity markets. This platform is a natural evolution towards developing the most efficient means of selling significant volumes of wool.

“Buyers in turn can compare all prices in real time with all parcels of wool available simultaneously over multiple rounds of bidding,” he noted.

An integral feature of the platform, he added, was as a tool to provide an objective reference point from the perspective of both buyers and sellers.