Wool Tenders Criticised

North Island wool growers are likely to be selling themselves short by allowing their clips to be put up for tender, according to WoolPro.

In recent weeks, greater volumes of North Island wool have been offered by tender than have been sold through the auction system.

“In a recent tender, none of the wool on offer was tested,” says WoolPro senior valuer Graham Roddick.

“In circumstances such as these, buyers have to offer very conservative prices because they are only guessing yield, colour and micron. They have to cover themselves in case the wool does not measure up when they test it.

“No matter how they sell their wool – whether by auction, private sale or Woolnet – farmers should have it tested and valued first. Otherwise they are the weak sellers they accuse others of being.”

The tenders are being organised by wool brokering companies on the day before each North Island sale. Buyers price wool on the basis of a hand-drawn sample.

Mr Roddick says the tenders call into question the commitment of everyone involved to the orderly marketing of the clip.

“Brokers and exporters are strong defenders of the auction system and recently called into question the integrity of in-shed testing operators,” he says.

“Yet it is hard to imagine a system which would do more to undermine auction prices than these tenders. Large volumes of untested wool are effectively being dumped on the market each week.”

WoolPro, as a grower-owned body, is committed to helping farmers be strong sellers, he says.

“To this end we provide an independent valuing and appraisal service, and have set up Woolnet.

“Until Woolnet becomes a major player, the auction will perform the main price-setting role in the industry. Also, because the auction and Woolnet involve sale on the basis of properly drawn and tested samples, they help growers to be strong sellers.”

Mr Roddick observes that farmers spend a year growing their wool and they are the only ones with a vested interest in maximising net returns from its sale.

“Farmers selling untested crossbred wool by tender are likely to be selling themselves short. Yet I know of very few farmers who can afford to throw money away.”

[ends]

For more information, please ring Graham Roddick
Tel 06 835 1888 or mobile 025 719 953

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