High vegetable matter in wool a shipping concern says Western Wool Centre

By Mal Gill
March 24 2022 - 5:00am
Wool buyer Greg Horne has advised wool handlers to "skirt well" because the amount of vegetable matter in fleece wool now has a significant influence on demand and price.

"SKIRT well" was the advice to wool handlers last week from wool buyers at the Western Wool Centre (WWC).

Basically, because the amount of grass seeds, burrs, dags and other contaminating material left around the edge of a fleece on the sorting table can determine later whether wool buyers at the WWC are prepared to bid for it or not.



Escalating shipping costs are forcing wool exporters to pay unprecedented attention to vegetable matter (VM) percentage and yield percentage columns in brokers' catalogues before they assess sample boxes on show floors.

The yield column reveals how much clean wool by weight will be left for processors to use once greasy fleece is scoured, carbonised and combed to remove sand, seeds, burrs, dags and other contaminants.

Obviously, the higher the VM percentage, the lower the yield percentage.

The problem for Western Australian woolgrowers and wool exporters is that the scouring, carbonising and combing is no longer carried out in WA.

So each 30-tonne shipping container of wool sent overseas for processing can contain anywhere between a quarter and up to half of its contents that essentially may be washed, carbonised and combed out of the wool as waste.

But exporters and their wool processor customers pay full freight rates on that waste material and with shipping rates having increased at least five-fold since November 2020, they now need to ensure containers are filled as much as possible with usable wool and a minimum of waste.

Greg Horne, WWC buyer for Europe's largest wool top maker Modiano, explained that low VM and high yield have now become as important factors in wool buyers' purchasing decisions as micron measurements are, because of the impact of high shipping costs.

"With the shipping cost of a container of wool now making up such a big proportion of a processor's raw materials cost, the difference between a 60 per cent yield and a 70pc yield (as an indication of how much clean wool a processor will end up with to manufacture into product) can be the difference between making a profit or a loss on that container," Mr Horne said.

"I can't bid on anything with a VM above 1pc and I prefer 0.5pc."

"I don't think some woolgrowers realise just how important clip preparation now is in relation to the price they'll ultimately receive.

"Skirt well is my advice to them and I think everyone in that room (buyers in the WWC sale room) will back that up."

Australian Wool Exchange (AWEX) technical controller at the WWC, Andrew Rickwood, also noted the influence of VM on prices in his regional market summaries after both trading days last week.

"The Fremantle fleece market has been driven predominantly by vegetable matter," Mr Rickwood said in his report on the second day's trading," Mr Rickwood said.

"Good style wools carrying less than 1pc VM attracted good demand - higher VM lots lost buyer support and continually trended downward.

"These (higher VM) lots accounted for many of the nearly 28pc of fleece wools that were passed in."

In the previous day's report Mr Rickwood had noted "mixed" trading results were "largely dependent on vegetable matter levels".

"Good style wools carrying less than 1.5pc VM received excellent support and were generally fully firm to five cents dearer," he said.



"Lesser style wools and those carrying more than 1.5pc VM did not receive the same support and were highly irregular, trending down."

Again, Mr Rickwood said much of the 21pc of the fleece offering that was passed in on that day comprised wools with higher VM.

Over the two trading days last week, WWC prices for fleece wools softened across the micron segments with falls of between 9c (20 micron to 1396 cents per kilogram clean) and 20c (21 micron to 1296c/kg), with most of the finer segments falls either 15c or 16c, according to AWEX.

As is usual, Merino cardings went against the fleece trend and added 8c to finish at 967c/kg for the week, still between 10c and 13c behind Melbourne and Sydney cardings auction prices.

The Western Market Indicator shed 11c to 1446c/kg for the week, compared to the benchmark Eastern Market Indicator which eased 5c to finish at 1408c/kg.

Local trader PJ Morris Wool and national trader Techwool Trading swapped second and top positions on the WWC buyers' list over the two trading days, while Chinese indent buyer Tianyu Wool was third both days.



But the quantities of wool the 'big three' - which usually top the buyers' list - bought last week was much closer in volume to other buyers operating at the WWC than it normally is.

This week the WWC offering and the national offering are both set to increase marginally, with 10,489 bales set to be auctioned at the WWC and 48,286 to be auctioned nationally, unless woolgrowers and brokers withdraw lots ahead of sales starting.

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