Wool Connect Conference Report 2020

More Consensus Needed – Wool Connect Online Conference Concludes

 

On 06-08 October 2020, the Wool Connect Online Grower conference took place with over 750 people watching either live or via on-demand recordings. Over the course of the three days of the conference, a total of 32 speakers presented during 2-hour sessions that included time for questions and an online debate via the available chat function. Attendees signed up from all major wool growing countries including Australia, Argentina, New Zealand, South Africa, Uruguay, the UK, and the USA. 

 

Each day over 220 attendees took part in the event live. Some wool growers from the Falkland Islands, the USA, Argentina, and Uruguay even attended the event live despite the conference taking place during the middle of the night local time. For those not able to attend the conference, recordings were made available afterward in English and Spanish and are still available to view via the wool connect online platform to everyone purchasing a ticket

Speakers from the entire wool supply chain and related stakeholder groups held 10-minute long presentations. The content focused on defining future market requirements and opportunities for wool in relation to sustainability, animal welfare, and traceability. 

 

The elephants in the room

During his opening remarks, The Schneider Group CEO, Giovanni Schneider, pointed out that he became concerned with sustainability within our industry at a very young age and that he “was excited when last year 250 companies decided to sign the ​Fashion Pact in Biarritz (France), committing on three very important environmental goals by 2030: the first one is stopping global warming, second restoring biodiversity and the third one is protecting the oceans”. He also felt very pleased with the quality of the content that the “amazing speakers” gathered for the conference would bring forward and “honoured” by the number of people joining Wool Connect. Finally Giovanni anticipated that it would be a controversial conference since it would address “the two big elephants in the room: sustainability and animal welfare”.

Acknowledge what is

Overall, the goal of the conference was to create an unfiltered dialogue between retailers, processors, and other industry stakeholders sparking much-needed consensus.  Acknowledging and openly discussing discrepancies between wool supply and demand was the starting point for this first edition of Wool Connect.  Main discussions revolved around topics such as the increasing requirements for non-mulesed wool, sustainable production, sequestering carbon emissions, biodiversity, certifications, and traceability.

Certification overload

The point raised by Marta Maniero from Marzotto exposed the high number of certification schemes available in the market and the complexity this brings for growers and processors alike. The number of times this issue was raised by speakers and discussed among attendees initiated further discussions among certification scheme owners after the conference evidences the need to find a joint and simple solution to the certification jungle. Point taken and progress will be revised in Wool Connect 2021.

Mulesing is not a binary discussion

On the topic of mulesing the conference highlighted the increasing demand for non-mulesed wool due to brand pledges to phase out mulesing by a certain date in the near future. Heinz Zeller, Principal Sustainability at Hugo Boss pleaded for a “stronger move towards the production of mulesing-free wool to reach a better acceptance of wool among consumers”.

The key take away was that the mulesing debate is not a binary one. By hearing the voices of brands like Ermenegildo Zegna, Kering, Hugo Boss, Muji and Armedangels, wool producers as well as animal welfare organisations such as Four Paws and HSI, it became clear that a new and decisive approach is needed. A sustainable solution for all parties involved can only be found through dialogue, mutual understanding as well as consensus building among all stakeholders. Hopefully, the fact that for the first time growers and animal welfare organisations have shared the same (virtual) room is already a big step in the right direction. 

An increasing number of issues 

Retailers presenting their sustainability strategies indicated that mulesing is not the only concern for them when it comes to wool. Other requirements towards wool growers have been expressed such as focusing on sustainable productions, carbon emission, and biodiversity.  The increase in complexity that retailers face as consumer expectations shift is nothing more than a multiplicity of opportunities to generate value for wool disguised as challenges. The commitment and passion for wool expressed by most speakers shouldn’t go unnoticed nor given for granted.

Storytelling is key

Last but not least the importance of communications and storytelling repeatedly came up as one of the opportunities for the industry to tell the beautiful stories wool has to offer in a more proactive way. Michel Mastio, Segment Director Hosiery and Circular Knitting Yarns at Südwolle Group even described their business as “selling services and stories, not only yarns”. Furthermore, comments by speakers and attendees included the need to better educate and communicate about the many good industry practices and high animal welfare standards.  

Stop the blame-game

Within the heated discussions during and after the conference attendees felt the urge to blame certain industry bodies or industry stakeholders as to why and how we got to where we are today particularly on the mulesing debate. However, Wool Connect is not about identifying the culprit as we all got to where we are together. The wool industry is an interconnected system that reacts and depends on each other. Wool Connect wants to put the focus on the future by acknowledging the challenges, creating dialogue, and building consensus on the best way forward for everyone involved. 

It’s all about the money – or is it?

Another question raised several times among attendees within the discussion was about who will pay for all the certifications and extra work required to meet retail demands? What is the right perspective on this? Are we talking about costs or about creating value? One takeaway of the conference was that sustainability needs to be easy and comprehensive for all involved and create tangible value. Whatever solution moves away from these principles is unlikely to succeed in the market. Thomas Moe, Senior Product Director at Salewa, described this as “green business, where everybody in the supply chain needs to earn money”. 

This was also a topic addressed by speaker Gunter Pauli who said that running businesses on efficiency and cost-cutting is no longer going to work. Businesses of the 21 century need to be able to sustain themselves which means taking care of people, the planet, and profit. This is easier said than done but also indicates that market economics as we know it can no longer continue. Covid-19 has been a magnifying glass on this issue over the past months and new concepts such as the doughnut economy and new tax systems are being developed under a higher stage of modern capitalism.

 

Next edition in 2021

Wool Connect was a spontaneous event that was born out of the idea to organise a small internal meeting for Authentico registered wool growers only. The idea, however, morphed quickly into a global conference available to all wool growers. The short time frame taken to organise the event posed some limitations to the content. The goal of this first Wool Connect edition was to clearly call out and acknowledge the existing challenges within the wool industry. The concluding message given by Willy Gallia, Chief Sustainability Officer of the Schneider Group, and team lead of the event, was the importance of finding consensus among all wool supply chain actors as this could only achieve progress and value for all. Creating more opportunities for dialogue and consensus-building will be the goal for the next Wool Connect conference in 2021. 

 

We thank all sponsors supporting the Wool Connect conference. In particular, we thank Control Union for supporting the event as Gold sponsor.

FREMANTLE MARKET REPORT

COMMENT

Fleece generally 110-130 cents dearer, skirtings 100 cents dearer and open tops 100-150 cents dearer.

FLEECE

The Fremantle market followed Melb/Syd and saw prices generally 110-130 cents dearer today. 20.5u and broader were the most affected. The market settled half-way through the sale and perhaps some signs of easing slightly towards the end.

We still saw a passed-in rate for fleece of 1.2%.

SKIRTINGS

Skirtings were generally 100 cents dearer.

OPEN TOP

Open tops were generally 100-150 cents dearer, with 17.5u and finer the most affected.

 

 

EASTERN AUSTRALIAN MARKET REPORT

Market extreme.

COMMENT

Chinese activity was obvious from the outset. All descriptions significantly dearer.

FLEECE

All fleece around 8 to 10% dearer

SKIRTINGS

Fine skirtings being bought ‘at best’

18.5 micron and finer 10 to 12% dearer – 16.5/17.5 most affected.

19.0 / 20.5 micron 8% dearer.

OPEN TOP

Nominally 8% dearer.

FUHRMANN NZ MARKET REPORT

Summary

Market dearer.

Comment

North Island only offering 6,000 bales.  The selection consisted of 35% crossbred hogget fleece, 32-36 micron mainly good/average  colour, 30% crossbred second shear/hogget shears bulk 75-100mm good colour, 15% crossbred fleece good/average colour, 10% associated oddments, 5% lambs and 5% miscellaneous types.  Keen widespread competition with most sectors operation strongly

Fleece Wools

Good colour crossbred fleece 6% dearer.

Poorer style 3% dearer.

Second Shears

Crossbred shears including hogget shears 75/100mm & shorter up to 4% dearer.

Oddments

Clothing oddments 5% dearer.

Passings

2% Passed In.

Next Auction

South Island only, offering 8,900 bales, 22 October 2020.

AUSTRALIAN WEEKLY MARKET REPORT

Comment

It has been an extraordinary turn around for the wool market in the last two weeks. Driven by Chinese demand, all types and descriptions were significantly dearer. With greasy wool supplies low and some fresh demand for prompt delivery, exporters were able to sell good volume leading into the sale and this was followed up again on Tuesday after the first sale day. The main interest is driven by the Chinese domestic market and focused on 17.5 and 18.5 micron short wool tops for the woollen and semi worsted business. Global demand remains limited.

AWEX Eastern Indicator compared with 09/10/2020

Eastern Indicator

Close: 1117

Change in % +9.3%

If you want to learn more about AWEX indicators, visit the official website http://www.awex.com.au

Authentico Index Values

15 Micron

Close: 2565

Change in %:  +8.14

16 Micron

Close: 2136

Change in %: +8.26

17 Micron

Close: 1865

Change in %: +7.49

18 Micron

Close: 1671

Change in %: +9.07

19 Micron

Close: 1444

Change in %: +8.49

Authentico Indicator

Close: 1889

Change in %: +8.25

Forecast

The price premium for fine and superfine over the medium micron merino is very healthy. The superfine sector has often felt the most impact during any market downturn but this has been very different. From 19.0 micron up to 15.5 micron we are seeing a premium of at least 20c per kg for every 0.1 of a micron.

The market is often variable and fluctuating through this period. This might be felt more due to the absence of any great competition for the Chinese but some exporters believe that the market strength is expected to remain through until December. It might depend on the Chinese National Singles Day, the national online shopping event on November 11. If this is successful, demand could continue through to December.

Auction offering – current week

Market          Sale          Offered             Sold       Passed In

North                      S 16                      8101                         7967                  1.7%

South                     M 16                     14351                      14049                 2.1%

West                       F 16                       5228                         5007                 4.2%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 17                        T / W                         7660

South                      M 17                       T / W                       17832

West                        F 17                        T / W                         8601

 

If you want to see the complete Wool Sales Roster click here.

FREMANTLE MARKET REPORT

COMMENT

Fleece generally 150 cents dearer, skirtings 150 cents dearer and open tops generally 80 cents dearer.

FLEECE

An extremely hot market in Fremantle today with prices generally up 150-160 cents compared to F15 last week. Fine wool was the most affected, with some 18.0u and finer up to 175 cents dearer. Prices continued to rise in the first 30 mintues and then held these levels right to the close of the sale.

Despite the rise, we still saw a passed-in rate for fleece of 4.8%.

SKIRTINGS

Skirtings were generally 150 cents dearer, with the finer microns most affected.

OPEN TOP

Open tops were generally 80 cents dearer.

 

 

EASTERN AUSTRALIAN MARKET REPORT

Market squeeze continues. All descriptions strongly upward again.

COMMENT

Some buying at best to secure quantity against prior commitments. Chinese interests dominating.

FLEECE

All dearer, tender wool most affected.

15.5 to 18.5 micron 4 to 5% dearer.

19.5 to 21.5 micron 3 to 4% dearer.

SKIRTINGS

Burry and inferior lots most affected.

16.5 micron 3% dearer.

17.0/19.0 micron 5% dearer and keenly sought after.

19.5/20.5 micron 3% dearer

OPEN TOP

3 to 4% dearer

EASTERN AUSTRALIAN MARKET REPORT

Market much dearer.

COMMENT

Prices opened strongly and were maintained. Knitting types most affected.

FLEECE

All fleece between 4 and 5% dearer with tender types most affected. Very minimal price premium for staple strength.

SKIRTINGS

5 to 6% dearer, finest most affected.

OPEN TOP

3 to 4% dearer

NEW ZEALAND MARKET REPORT

Summary

Merino market generally dearer.

Comment

There was a good offering of fine wools and halfbreds this week ranging from 13.5 micron through to 21.0 micron.  The market was well supported by a full bench of buyers.  18.5 micron and finer were keenly sought after and were up to 8% dearer when compared to the last South Island sale.  19.0 micron were cheaper while 19.5 to 20.0 micron tended dearer.  Finer Halfbred wools were up to 4% dearer while coarser mid micron wools were mixed.

FUHRMANN NZ MARKET REPORT

Summary

Market dearer.

Comment

South Island only offering 8,300 bales.  The selection consisted of 35% crossbred/hogget wool, 32-36 micron mainly good/average colour, 15% second shear bulk 75-100mm good colour, 15% super style merino fleece bulk 15-18 micron, 15% halfbred fleece good style bulk 23-26.5 micron, 10% associated oddments, 5% lambs and 5% miscellaneous types.  Keen widespread competition with all sectors operating.

Fleece Wools

Good colour crossbred fleece 4.5% dearer.  Poorer styles sellers favour.

Merino fleece 18.5 micron and finer keenly sought after, 6.5% dearer.  19.0-20.0 micron 5% cheaper.

Halfbred fleece 22.0-26.5 micron 5% dearer.  27.0-30.0 micron firm.

Second Shears

75/100mm & shorter 4% dearer.

Oddments

Clothing oddments sellers favour.

Passings

11% Passed In.

Next Auction

North Island only, offering 6,000 bales, 15 October 2020.