Feds hail on-line fibre exchange as useful innovation

Transparency, ease-of-use and the potential for increasing competition among buyers are among the positives of the Natural Fibre Exchange (NFX), Federated Farmers says.

The NFX, which is owned by shareholders Wools of New Zealand and Alliance Group, kicks off the first of its fortnightly on-line trading events tomorrow. (SUBS - TUESDAY, MAY 22)

Federated Farmers Meat and Wool chairperson Miles Anderson sees NFX as an innovation that potentially can stream-line the selling-buying process, raise awareness of wool and reach a wider buyer market.

"Buyers can use their digital devices to participate and don’t need to physically attend an auction.

"It could work in a very similar way to TradeMe, increasing the chances of greater competition among buyers."

It could be argued that the existing system of buyer-seller contracts has advantages of maintaining a more direct relationship between producer and buyer, and greater ability to demonstrate reasons for a premium based on the product’s ‘story’ and environmental credentials, but the contract option still remains.

"This just adds another avenue," Miles said.

NFX has already secured commitments for 6.5 million kilograms of the nation’s crossbred clip out of the 150 million kilograms New Zealand farmers produce each year.

"It’s only natural there will be some initial scepticism around how it will work and whether it will last. I think there will be other brokers and major players keeping a close eye on how the first few on-line trading events go," Miles said.
"Reducing transaction costs is a plus, as that means there is more money available for the producer. Federated Farmers wishes the new venture every success."
ENDS

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