Trade

AWI wool selling review panel ‘barking up the wrong tree’

Terry Sim, August 17, 2015
Techwool Trading export manager Josh Lamb

Techwool Trading export manager Josh Lamb

AUSTRALIAN Wool Innovation’s Wool Selling Systems Review panel has been accused of “barking up the wrong tree” with its proposed online Wool Exchange Portal.

At AWEX’s Hamilton Wool Forum on Saturday, Techwool Trading export manager Josh Lamb said opening up the wool industry to direct business through a web portal could have payment guarantee and letters of credit issues, especially in situations like the recent devaluing of the Chinese currency.

“These are a lot of the issues that weren’t considered by the review — that’s a massive issue.”

The biggest problem Mr Lamb saw with the review was that it’s discussion paper did not reflect the industry submissions received. These were prepared with the knowledge of “hundreds and hundreds of years of experience,” he said.

“When you read that report (the review’s discussion paper) you can’t see any of that, at all.”

AWI should not have funding cut

With WoolPoll 2015 to be launched on August 28, Mr Lamb said he firmly believed that AWI had to exist and didn’t support cutting the research, development and marketing body’s funding to “let them disappear”.

“Someone has to do that job — they do so much work in the background through Woolmark and with the mills that no-one ever sees; developing new products and getting mills off the ground.

“Most of the mills in China were kicked off with help from Woolmark engineers and technicians,” he said.

“So you can’t completely bag them, but I think they are looking at the wrong thing, they are barking up the wrong tree I think.

“Opening up the sale of wool through an internet portal to everyone around the world — I mean, do they think there are mills in the world that are not buying wool now because they don’t know how to source it?”

Mr Lamb said every day of the year there was a wool exporter knocking on a mill’s door trying to convince them to buy Australian wool, whether that is Merino or crossbred, fleece wool or cardings.

Time for AWI to ramp up wool promotion

Fox and Lillie Rural trading manager Wes McNaughton said growers were paying AWI about $23 a bale in wool levies.

“Now is the time they really need to ramp up the marketing of wool and they need pressure from their shareholders to really keep the market up this high and develop new projects.

He believed growers had been let down and AWI had been concentrating on too many other ideas that don’t make farmer’s money.

Exporter-AWI relations have broken down

Mr Lamb said in the last 6-7 years exporters and until AWI had “built a few bridges” through various initiatives by AWI and the relationship had been “pretty good”.

“What has happened this year with the AWI (Wool Selling Systems) Review, a lot of those relations have broken down and I don’t think that is good for the longer term.

“I think they have broken down for good reason and I think it is up to AWI to have a better look at how they are trying to focus their energies and finances on improving wool prices.”

Mr Lamb said the review had principally concentrated on the auction system and what the WSSR panel considered was a lack of competition on the buying side with trade and on the brokering side with charges.

“Our view of it is, why are you trying to save the wool grower $30, $40, $50 a bale when really what they need to do is generate another $400 or $500? And they are not looking that.”

Mr Lamb said AWI is focussed on the AWEX indicator “and when it is going up it’s ‘pat’s on the back’ and when it is going down it is someone else’s fault”.

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Comments

  1. Edward H Wymer., August 18, 2015

    Great article and report. The WSSR objective of savings shed-to-ship, was/is never going to make appreciable savings. The wool portal will only add costs as well.
    Part of the solution is to fine tune the present system with better classing, properly policed. Wool should not be allowed to be sold poorly classed or unclassed. A modern accurate testing method is needed to avoid the current lottery. woolman.biz

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