Handful cash-in on superfine premium


A HANDFUL of WA woolgrowers appear to be cashing in on exceptional prices for top specification, soft, high-crimp specialised wool, with massive increases in volumes tested through December and January.

A HANDFUL of WA woolgrowers appear to be cashing in on exceptional prices for top specification, soft, high-crimp specialised wool, with massive increases in volumes tested through December and January.


The premium buyers are prepared to pay for wool appraised as Australian Superfine (ASF) Merino, particularly for 17.5 micron fibre or finer, which appears to have dragged supplies out of wool stores and farm sheds across WA.

Australian Wool Testing Authority (AWTA) statistics from its Perth laboratory for the season so far, July to the end of January, show the volume of 16.5 micron or finer ASF wools tested has increased by a massive 142.7 per cent over the same period last season.

In July-January of the 2016-17 season, the Perth AWTA laboratory, next to the Western Wool Centre (WWC) in Bibra Lake, tested 253.4 tonnes of 16.5 micron or finer ASF wools.

In the same period this season, it tested 615 tonnes, much of it since October and most in December and January as the wool market peaked.

The increase for 16.6-17.5 micron ASF wool tested was almost as remarkable but on significantly larger volumes.

In July-January 2016-17 AWTA tested 1472.8t of 16.6-17.5 micron ASF, while this season it has tested 3408.9t, an increase of 131.5pc.

The increase in WA’s 16.5 micron and finer ASF wool volume was in stark contrast to all other States where volumes tested so far this season by AWTA have declined between 5.3pc in Tasmania and as much as 36pc in Victoria.

In 16.6-17.5 micron ASF wools WA volumes were also way in front of the Eastern States.

Volumes declined slightly in Victoria and New South Wales and the biggest increase was 37.2pc in South Australia on a tiny volume only one fifth of WA’s.

Not that WA’s volumes of ASF were large – 16.5 micron and finer ASF comprised just 0.9pc of the State’s total wool clip so far, according to AWTA and 16.6-17.5 micron ASF comprised 4.8pc.

But the Australian Superfine Woolgrowers Association has only about 10 members in WA entitled to use its coveted rams head stencil on their bales as a sign of top quality wool.

While many WA woolgrowers acknowledge receiving their best prices ever for this season’s clip, only the handful producing ASF Merino wool have been able to attract the top premium prices of more than $4000 a bale.

The influx of ASF wool arriving at the Perth AWTA laboratory has coincided with price records being set and reset at the WWC throughout December and into January.

But ASF wool appears to have been relatively immune to any negative market reactions for lesser specification or broader micron wools.

For example, on Wednesday, January 17, with the WWC market generally backing away from record year-opening prices of the preceding week, the three highest prices at the WWC were paid for Merino fleece appraised as ASF style 4, or best, according to Australian Wool Exchange (AWEX).

A top price so far this season of 2540 cents per kilogram greasy (3369c/kg clean) was paid for 14.2 micron, 85 millimetre staple length wool yielding 75.5 per cent.

That price equated to a bale of greasy wool being valued at $4478.02 based on a lighter than usual average January bale weight of 176.3kg.

Second top price was 2430c/kg (3284c/kg clean) for 14.1 micron, 84mm wool yielding 74pc and third was 2345c/kg (3073 clean) for 15.1 micron 83mm wool yielding 76.3pc and still worth more than $4134 a bale.

The following Wednesday, with the market in full retreat, a top price of 2181c/kg (3012 clean) was paid for 14.7 micron, 71mm wool appraised as ASF5E and yielding 72.4pc.

On Wednesday last week with big price falls seemingly over and the market stabilising, 1870c/kg (2656 clean) was paid for 16.1 micron, 75mm ASF5S wool yielding 70.4pc.

ASF wool has been offered at the WWC at more than 1800c/kg since early November with WWC technical controller Andrew Rickwood regularly noting in his market reports that buyers were prepared to pay a premium for top quality.

On November 23, a buyer paid 2150c/kg (2982 clean) for 14.2 micron, 85mm ASF4E wool yielding 72.1pc and on December 13, 14.4 micron, 69mm ASF5S wool yielding 68.3pc sold for 2080c/kg (3045 clean).

AWTA Perth’s sampling operations manager Rob Hallion agreed “astounding” prices had cleared wool stores and farm sheds of stocks of ASF wool held for just such a market, but pointed out that was not the whole story.

“When our grab samples are returned to the wool stores it’s obvious some of it (ASF wool) has come out of store, but there’s also a lot of fresh wool in the market,” Mr Hallion said.

“I think there’s a combination of factors at play.

“We’ve noticed that the lot size has reduced considerably, it’s down about half a bale on what it was last season.

“We are also seeing more lots and fewer bales,” he said.

AWTA statistics for the season support Mr Hallion’s observations, with the average number of bales per lot easing back from 7.15 last season to 6.76 this season, a 1.6pc increase in the number of lots tested to 35,004, but a 4.1pc decline in the number of bales tested to 236,555.

“I think woolgrowers and their wool classers are reacting to market information and probably on the recommendations of wool brokers, they are creating (separate) lines for the finer wool that we might not have seen a few years ago,” Mr Hallion said.

“The wool cut is obviously not as heavy this season as it was last season (so) the price premium the better specification finer wools command makes it worthwhile to create that finer line,” he said.

Modiano Australia wool buyer Greg Horne said there had “certainly been a turnaround in sentiment” recently on superfine wool.

“Six or eight months ago it wasn’t attracting the premium it is now,” Mr Horne said.

“Interestingly, the demand is being driven by the Chinese who seem prepared to pay the prices.

“That’s unusual because you would normally expect demand (for ASF wools) to come from Italy, that’s traditionally where it has come from.”

Mr Horne said the ASF wools were sought after for the growing next-to-the-skin wool market.

During January AWTA Perth tested a total of 35,833 bales, a 2.8pc increase on January last season.

They were split into 5384 lots, a 15.6pc increase on the previous January.


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