AUSTRALIA’S largest wool exporter, Techwool Trading, has defended the behaviour of some of its Indian clients through recent auction price drops after reports of large-scale contract defaults.
The Australian Council of Wool Exporters and Processors told Sheep Central recently that Australian wool exporters have lost millions of dollars in cancelled and renegotiated contracts with Indian and Chinese customers after the dramatic drop in wool prices this year due to COVID-19.
Australian Council of Wool Exporters and Processors president Josh Lamb has said the body is aware of cumulative losses with Indian clients totalling about $4.8 million on more than 800 tonnes or 7000 bales of wool.
However, Techwool Trading managing director Rod Franklyn said not all Indian companies misbehaved during the period in which Australian wool prices dropped dramatically earlier this year.
He said that some of Techwool’s Indian customers have been honourable throughout the COVID-19 disaster “to the financial detriment of themselves.”
Mr Franklyn said India’s largest top maker, Grasim Industries, has been buying from Techwool for over 28 years “and in all this time our relationship has been ideal, with no issues over this lengthy period.” Grasim Industries buys about 50,000 bales of wool from Australia annually, that represents 35-40 percent of Australian wool imported into India.
He said Techwool had also not experienced any issues with another Indian client, Indorama Wool.
The benchmark AWEX Eastern Market Indicator dropped from 1442c/kg to 1287c/kg in early May and continued to fall to 1110c/kg by the end of June. By the first week of September the EMI hit 858c/kg, its lowest point since 2002. The volatility in greasy wool prices during this period created issues with importers whose wool shipments lost value after being bought and while they were being delivered. The EMI has since recovered on a fluctuating path, closing at 1188c/kg clean this week.
Techwool Trading defends Indian clients
I feel that it is necessary on behalf of Techwool to respond to the article on 28th October regarding wool exporters’ losses.
Josh Lamb’s (ACWEP president) explanation of the problems encountered in India highlights the current difficulties Australian exporters are facing and gives an accurate picture of where we all stand in not only India, but also China and multiple other export countries around the globe.
Not all of our Indian customers have misbehaved though, and in the experience of Techwool some of our Indian customers, both large and smaller importers have been honourable throughout the COVID-19 disaster to the financial detriment of themselves.
Although it is not our policy to name any of our individual customers, I would like to nominate 2 who have been 100% ethical during this period.
Grasim Industries (Jaya Shree).
The largest top maker in India and a major customer of Techwool. They have been buying from Techwool for over 28 years and in all this time our relationship has been ideal, with no issues over this lengthy period.
Even with shipping problems during the shutdown of most Indian ports, all issues were settled fairly and amicably. We continue to hold them in the highest regard, and we look forward to their continued support of the Australian wool industry.
During the last three years of trading together, our relationship with Indorama has remained extremely strong, and we hold them in the highest regard – their integrity, and honesty throughout the COVID period has never been in question, and we have worked together very closely to allow us all to ride through this difficult period together. We have experienced no issues with any of their orders.
It is necessary to nominate the above 2 customers as being of the highest integrity as we cannot afford to lump them in with those who have been unethical.