The 2017/18 season is shaping up to be another promising year for Western Australia’s wool producers, according to agribusiness specialist Rabobank, with optimism in the sector expected to draw strong crowds to this year’s Rabobank WA Sheep Expo and Ram Sale at Katanning.
Rabobank regional manager for Western Australia Crawford Taylor said the expo and sale, this year held on August 17 and 18, brings together the state’s leading sheep studs and also a large number of producers who travel to Katanning to see some of the best genetics under the one roof.
“In previous years, the sale has been highly competitive, and this year it should be pushed up by the positivity prevailing across the industry,” he said. “This optimism was evident in Rabobank’s latest survey of rural sentiment, which found confidence amongst the state’s sheep producers to be higher than other ag commodity sectors.”
Mr Taylor said strong demand from processors had seen the Western Market Indicator average 1452c/kg (clean) in 2016/17 – up some 25 per cent on the five-year average.
“We have seen China’s imports of Australian wool rise strongly, with their seemingly insatiable demand to replenish the pipeline helping the wool market record its highest season close on record,” he said.
Mr Taylor said the supply backdrop made some of the wool price performances even more impressive, with WA’s production lifting by an estimated nine per cent through the 2016/17 season – to contribute to the four per cent rise in the overall national volume of wool and recover some of the six per cent lost during the previous season.
While superfine prices were buoyed by the first decline in fine wool production (less than 17.5 micron) since 2010/11, Mr Taylor said the strength of mid-micron markets in light of the 12 per cent production lift in wool tested for the year highlights the strength of demand.
Turning to the 2017/18 season, Mr Taylor said Rabobank is expecting wool prices to remain supported by low supplies.
“At this stage, supply doesn’t appear to be raising many headwinds, with early production forecasts expected to remain steady, however the dry winter in the west and also south- east of the country may impact both the profile and size of the clip,” he said.
Mr Taylor said the recent strength and short-term outlook for the Australian dollar is a potential risk factor to current price levels.
“Wool prices in US dollar terms have risen considerably since their five-year lows of 2015, with the Western Market Indicator for 19 micron and 21 micron, up some 53 and 34 per cent, respectively,” he said.
With stocks in the pipeline reportedly low, pull-through demand from retail will be needed to maintain prices at the current levels, he said.
Rabobank has supported the WA Sheep Expo and Ram Sale, regarded as the state’s premier merino event, for the past 15 years.
This year’s show will take place at the Katanning Showground on Thursday 17 and Friday 18 August, followed by the ram sale on Friday afternoon.
Rabobank Australia & New Zealand Group is a part of the global Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has nearly 120 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 40 countries, servicing the needs of approximately 8.6 million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand Group is one of Australasia’s leading agricultural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 94 branches throughout Australia and New Zealand.
Media contacts:
Denise Shaw
Head of Media Relations
Rabobank Australia & New Zealand
Phone: 02 8115 2744 or 0439 603 525
Email: denise.shaw@rabobank.com
Skye Ward
Media Relations Manager
Rabobank Australia
Phone: 02 4855 1111 or 0418 216 103
Email: skye.ward@rabobank.com