Relative calm to keep wool market afloat

Fingers crossed in countdown to Christmas recess

Sheep
BEST ATTIRE: Attractive price premiums of about 20 per cent are being paid for wools that are sustainable-certified, as these are in strong demand globally.

BEST ATTIRE: Attractive price premiums of about 20 per cent are being paid for wools that are sustainable-certified, as these are in strong demand globally.

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Trade anticipates calm conditions for wool leading into the Christmas recess.

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In a week when just about every other world market was bouncing around all over the place, the wool sector showed relative calm and composure to close barely up a bit in local currency, and down a bit in US Dollar terms.

The familiar pattern of superfine Merino wools performing strongly, medium Merino types going pretty well and crossbred lines being only "so-so" was back again.

By the end of the two-day sale, just under 40,000 bales had been sold and everyone could focus on tallying up orders and selling a bit more - and then preparing orders for the final two weeks before the Christmas auction recess.

Most people in the trade anticipate there will be a relatively calm market in the coming two weeks in the lead up to the recess.

Topmaking mills will continue to purchase as usual, given the shipping issues that seem to mean it takes up to a month - or even six weeks - before the bales actually leave Australian shores these days.

Traders will certainly be happy to see the market finish on a firm note.

Those hard-working buyers in South Africa have already knocked-off as they start their Christmas recess from now.

But they must drag themselves back off the beach by January 12 when sales resume.

Not having Cape sales for the next two weeks will ensure even more focus on any sustainable-certified wools which appear in Australian catalogues.

The current premiums of about 20 per cent for these wools are attracting growers all over the world to the certification process, which is a good thing.

But the buying and processing trade are beginning to wonder if the current premiums are sustainable.

The Black Friday selling period was very good for retailers in most markets.

But it seems the equity traders got caught up in the frenzy as well and stock markets, particularly in the US, tanked last Friday.

Traders in equities and currencies always trying to be ahead of the pack highlighted just how jumpy the world is, and how fragile the recovery from COVID-19 actually is.

The volatility didn't affect the wool market.

But just about every other commodity took a hit, recovered and then dropped again as "experts" postulated about something scientists are still trying to work out - the efficacy of current vaccines against the new COVID virus variant, and just how much of a threat it really is.

So, while we leave the scientists to do their work, and report to the world when they can, others have been getting on with the job of promoting wool and creating new ideas to increase its consumption across the globe.

A quick look through the latest Wool Lab from the Woolmark Company shows the multitude of new developments in athleisure wear, pyjamas and home office attire for the upcoming season.

It also unveils interesting new products, such as a woollen yoga mat and some hand knitting yarn made with organic crossbred wool, which now has the ability to be dyed with much more ecologically-friendly dyestuffs.

Products such as these, ticking all the boxes for the eco-warriors and environmentally conscious consumer, keep wool front and centre for the designer who creates the products, which ultimately get ordered by the retailer to appear on the shelf.

Woollen curtains, upholstery fabrics and automotive interiors are all product innovations being dangled in front of the world's designers to entice them to use more medium and coarser micron wool.

With the home office taking a much more prestigious ranking, fitting it out in the most comfortable fibre known to man makes a lot of sense from an environmental and wellness perspective.

As the Europeans look like spending a lot more of their Christmas holidays locked up at home, a lot of the marketing focus should obviously be directed there - to keep them comfortable while they ponder a higher vaccination rate.

The Chinese domestic market, 50 per cent of which now occurs online, has had a reasonable couple of months.

But there is certainly not a mega sales volume as in previous years when the Chinese economy was still firing on all cylinders.

The current situation leads to a more cautious approach, and less stock ordering with glee abandon from the retail chains.

This is probably a good thing overall, as - in previous years - piles of left-over goods were dumped at discounted prices, leaving everyone in the pipeline a little disconcerted.

Now, the early stage processors are looking at trends and trying to anticipate what sort of wooltops and yarns will be in most demand when production restarts for the 2022-23 season.

That seems a long way off for many, but the process is starting now from a design point of view - and a greasy wool accumulation point of view.

Wools being purchased now will really only reach Chinese mills after the Chinese New Year in 2022, which is when they expect production orders to hit them in earnest.

With the continued threat of mandatory shut-downs at the even slightest hint of a positive case in their city, processing mills are definitely trying to stay ahead of the curve.

With this in mind, it is difficult to see too many mills in China taking their foot off the pedal.

So, we should see solid markets persist for the remaining two sale weeks until the shutters come down for Christmas.

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