SHIPPING problems continue to hinder Western Australia's wool industry recovery from the impact of COVID-19 last year on its international clients.
With shipping costs generally acknowledged as having increased at least five-fold over the past 12 months, consigned containers of wool disappearing from shipping manifests for two months or more is another frustration local wool buyers claim they can well do without.
Paul Foley, managing director of Swan Wool Processors, said the company had recently feared a sea container of wool sent to Europe had gone missing.
It was more than two months overdue when the client rang to say it had turned up, he said.
Other wool buyers have said they believe WA wool containers sent from Perth via Singapore to Europe are being offloaded in Singapore, displaced by containers from China going to Europe which are worth more to shipping companies than WA cargos.
Shipping companies charge about $20,000 from Fremantle to Europe via Singapore, but containers from China to Europe via Singapore are worth about $27,000 to shipping companies, so get priority, one exporter explained.
As recently noted in Farm Weekly, buyers representing European woollen mills and fashion houses have featured more prominently than usual in Western Wool Centre (WWC) trading over the past two months as trading with Europe returns to a post-COVID 'normal' and the northern hemisphere heads into winter.
Fremantle Wool Trading director John Bradbury again last week warned shipping problems had the potential to "crash the (wool) market", repeating a warning he first issued back in March.
Back then, wool exporters raised the problems of shipping price hikes and uncertain scheduling through the Australian Council for Wool Exporters and Processors (ACWEP).
ACWEP took the concerns to the Australian Peak Shippers Association (APSA) committee of management, the designated peak shipper body where it has representation.
APSA combines with the Freight & Trade Alliance, a peak body representing the international trade and logistics sector, as an advocacy group on supply chain issues.
It had been suggested in March that the shipping situation might improve by the middle of the year, but exporters last week said they were yet to see improvement.
About five companies export wool from Fremantle Port and were reluctant to speak out or identify themselves for fear of retaliation.
The impact of shipping delays on the WA wool market is two-fold.
Firstly, the extended time it takes to deliver wool can create cash-flow problems for traders who operate on credit and depend on regular client payments to fund ongoing wool purchases at live auctions at the WWC.
Secondly, risk of prices dropping below a level that is profitable for traders after they have purchased and before they can deliver to clients, increases with shipping delays.
This makes traders more cautious in the sale room, buying only what is required to fill existing orders and less inclined to speculate on buying for anticipated future orders.
With less wool available through significant reductions in WWC and national auction offerings, prices firmed strongly on the first trading day last week, then eased slightly on the second day when more wool was offered.
At the WWC, price rises the first day were bigger than those at Melbourne and, particularly, Sydney selling centres.
On the second day prices easing was less pronounced at the WWC than at Melbourne and Sydney selling centres.
As a consequence, by the end of trading indicative wool prices across all three selling centres were more aligned than they have been recently.
The Western Market Indicator finished up 34 cents for the week at 1402 cents per kilogram clean, after hitting 1404c/kg on the first day.
Its finishing level after week 18 of the selling schedule, was the highest since 1406c/kg at the end of week six, in early August, although it had briefly hit 1401c/kg two weeks ago.
The benchmark Eastern Market Indicator added 7c to finish at 1340c/kg.
WWC Merino fleece micron price guides and the Merino cardings guide added between 53c (20 micron to 1356c/kg) and 16c (19 and 19.5 micron to 1642c/kg and 1487c/kg respectively) for the week with one exception.
That was the 18 micron fleece guide which shed 31c to end at 1992c/kg.
Brokers said spring-shorn wools coming onto the market were very good quality but also broader in micron than usual.
Newly-shorn better wools were more mid-micron than finer micron, so that was where demand was strongest, brokers acknowledged.
The WWC passed-in rate for the week was 13.1 per cent and 14.4pc of the offering had been withdrawn before the auctions, Australian Wool Exchange statistics showed.
At this stage, the WWC is scheduled to offer an extra 1411 bales - 6761 in total - this week, while the national offering is expected to grow by 1382 bales to 40,742.
p Australian Wool Testing Authority (AWTA) statistics show the average WA wool fibre tested last month was 19.5 micron, up 0.5 micron on the average wool diameter tested in October last year.
The average WA wool tested so far this season was also 19.5, up 0.4 micron on July 1-October 31 last season.
By comparison, last month the Australian average wool micron reduced by 0.1 to 20.3, influenced by average micron reductions in South Australia, Victoria, New South Wales and Tasmania, according to AWTA.
So far this season the average national wool fibre is 20.4 micron, up 0.1 micron on the same period last season.
AWTA has tested 101,068 bales in WA so far this season, a 14.2pc increase on the 88,533 tested in the same period last year.
But the national wool testing number is up 23pc on last year - at 582,017 bales so far - with testing numbers up almost 25pc in Victoria, slightly more in SA and up by 30.8pc in NSW.
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