The Land, 22nd September 2011
Fibre cycle spurs top ram sales
MERINO sales are taking the market “by the horns” as replacement rams become the latest commodity to grab the headlines. With sales going gangbusters in NSW and interstate, a renewed confidence in the wool and sheep industry is evident. Averages have been up on last year’s results by close to $1000 in some cases. Lachlan Merinos, Forbes, recorded an average $915 above the stud’s 2010 result, while Roseville Park, Dubbo, jumped $879 on its average last year. Commodity analyst, Professor John Chudleigh, said the key issue to this had been supply. “I’ve always believed there had to be a point at which the supply shortage pushed the price up,” he said. “But prices still need to rise above where they are at present to attract more people back to wool. “I don’t believe those who got out of wool will go back in a big way at the current price of sheep; the EMI (Eastern Market Indicator) will have to settle between 1500 to 2000 cents a kilogram in the next five years before that will happen.” With the EMI at 1267c/kg on Tuesday, 7c/kg down on the previous week – but still up from the end of September last year, when it was 867c/kg – Professor Chudleigh said it was still not comparatively high. He was optimistic the rising Asian (particularly Chinese) market would be enough to move it up. “Silk went through the same period; finer wools just have to find a prestige market and be recognised as a superior fibre. Professor Chudleigh said there had been an uncanny cycle of wool price peaks and troughs during the past 100 years and Australia appeared to be emerging from one of those troughs. “There is room for the EMI to increase substantially and my suggestion is that we are at the beginning of the next major upturn in the fibre cycle.” The rise in cotton prices from US70 cents a pound to more than US200c/lb early in the year was a supporting factor for the fibre cycle. “Cotton has come back to about US100c/lb, but it is still high,” he said. Stocks of natural fibres, including cotton and wool, were still well below historical averages and would decline, lifting prices again, though possibly not until next year.
Below: Dennis Cox & Paul Galley
