Hopes wool conference will lift prices
Wool delegates from all over the world converged on Sanya, China, to discuss the international wool trade.
This massive get-together of manufacturers, weavers, spinners, brokers and agents as well as international wool boards is a trade fair for the wool industry bringing Chinese and global wool exporters to the same place to network and, most importantly, do business.
And this is where Australian wool growers could see the benefits.
According to Australian Wool Innovation (AWI) trade consultant Scott Carmody a lot of business is done at the conference because of the face-to-face time between buyers and sellers.
"If there is a lot of business done the market will jump," he said.
"Industry people are anticipating that this year, because of the lack of activity in the last two months from China, that the Chinese have been holding back a few orders to book up at the conference.
"While it can also impact the market the other way, I am more confident than not that we will see a change in market direction."
The formalities of the conference will also see the signing off of a review of the terms and conditions of trade between China and Australia and according to Australian Council of Wool Exporters and Processors executive director Peter Morgan, Australia has had a big win.
Mr Morgan said for some time Australia had been working toward changes to the terms and conditions surrounding dispute resolution and arbitration.
"Traditionally China has been operating outside some of the rules and regulations of the International Wool Textile Organisation (IWTO) in relation to dispute resolution," he said.
"But we have been finally able to negotiate changes which will see an inclusion of a dispute resolution procedure based on the IWTO procedures.
"In the current situation if a buyer and seller cannot agree, they are forced to use a legalistic and costly solution process managed by a Chinese organisation the China International Economic and Trade Arbitration Commission (CEITAC).
"But now we have introduced an intermediate step where members of the industry arbitrate the dispute at minimal costs to both parties which is a big step forward and very good news."
Back home last week, the wool market saw falls across the board with the Eastern Market Indicator (EMI) losing seven cents per kilogram finishing the trading week at 927c/kg.
But according to Elders wool sales manager Danny Burkett the market in the east, particularly in Melbourne, found a level late on Wednesday.
"Coming into the next fortnight will be a telling time to see if the market can settle at a level," he said.
"While the general consensus is that last week was the floor price only time will tell."
In WA the Western Market Indicator (WMI) also fell 8c/kg on Tuesday, the only day of sales, to finish off at 924c/kg.
The closing WMI was 363c/kg less than in the same week last year indicating the depressed state of the wool market.
Sales will occur in Sydney, Melbourne and Fremantle this week when 36,788 bales are registered for sale.
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