book.tascountry - Flipbook - Page 45
Business
News
Hopes rise as dollar dips
IT was a pretty big week in the
global wool industry with the
IWTO taking place at Adelaide
Oval, a very solid market courtesy of a weaker Aussie Dollar, and plenty of economic
announcements and data dumps
to keep everyone on their toes.
Although the wool market reports show prices were
unchanged in USD terms the
market had a strong tone and
those buyers who took advantage of the currency move to
increase their activity got some
very handy wools.
Certainly we will see others
wake up and come to the party
next week, so the outlook for
the coming week is certainly
for a fully 昀椀rm market, if not a
touch dearer.
Prices in local currency
terms were very pleasing after
the Australian Dollar hit a new
year-to-date low, dipping below
0.64 USD at one stage.
It occurred because the Chair
of the US Fed Reserve said that
it was “likely to take longer
than expected” to achieve the
level of con昀椀dence needed to
cut interest rates.
That’s banker speak for those
traders in the market to sit down
and chill for a bit longer as he
won’t be bullied into cutting
too early.
The market had been predicting 160-bps of cuts in 2024 but
have now been forced to progressively adjust their thinking
back to around only 40-bps for
the year.
This has surprised and disappointed those who have
been positioning their books
for lower rates soon, and so
the USD pushed higher, and
the AUD lower.
Risk-off tendencies also contribute to the lower Aussie as
capital 昀氀ows to the safer US
currency when people are worried about wars and the like.
The economic wrangling
Putting on the style
... the formal suit
is far from dead as
people are returning
to more stylish
out昀椀ts
WOOL
REPORT
Damien Whiteley
of the in昀氀ation beast has progressed fairly well in most
advanced economies around
the world but getting it back
within the banks’ target range
is proving a little more dif昀椀cult.
“Sticky” has become the
latest economic buzz word, as
services in昀氀ation, in particular, keeps climbing or not going
back to where they would like.
This means that mortgage
and cost-of-living relief for
consumers is still on the way
but it is a bit like chasing a rainbow at present – it just keeps
moving further down the road.
So too the decent jump in
wool prices that everyone
knows is coming, but just
doesn’t quite hit the auction
room.
The mood in the trade has
probably increased by a notch
or two following this week’s
gathering in Adelaide.
Everyone seemed pleasantly
surprised by the optimism and,
more importantly, the lack of
pessimism around the room,
even from the European brigade who admit they have
never seen things this quiet,
but still nobody was looking
to launch off the balcony.
Despite increases of 30 to 50
cents across the whole range
of microns this week in local
currency terms, the USD prices
were more or less unchanged.
So the market is not getting
dearer for overseas customers,
but Aussie growers banked the
pro昀椀ts from the currency for a
change.
Late in the week the currency market is unchanged,
but a lot can happen between
now and next Tuesday when
sales resume.
Assuming things stay the
same we should see a very solid
market again, even with South
African also back in the ring.
Supply globally is starting to
wane as it usually does around
now. The Chinese and Russian clips will shortly begin to
be harvested, but they should
not have a major impact on
the merino prices here or in
the Cape as their wools tend
to end up in different, lower
grade processing streams.
At the IWTO conference
several very well connected
manufacturers and retailers
Be this business.
gave presentations which contributed to the positive vibe
around the industry.
Everyone breathed a sigh
of relief when Richard Boide,
Managing Director at Dormeuil, outlined why the formal suit is far from dead, and
the casualisation of clothing
has had its day, and people
are returning to stylish, more
formal out昀椀ts even if they are
buying them in a different way
these days.
Laura Armstrong, Marketing
Manager from AWI, showed
that the message is actually
getting through to Millennials and Gen Z via the social
media campaigns and in昀氀uencers being used to highlight
the positive attributes of wool,
just at the time when they are
starting to question more and
more where their food and 昀椀bre
came from.
There is a long way to go,
as the numbers show and wool
is still an incredibly expensive
昀椀bre to produce and process
but there are so many boxes
being ticked by the wool 昀椀bre
and those who support it that
providing the industry keeps
funding these initiatives the
future looks bright.
That is, unless the current
Product Environmental Footprint Category Rules in their
current form are approved by
the European Parliament.
If this occurs wool is in huge
trouble, and we will have more
than one hand tied behind our
back, and it could actually
fatally wound the 昀椀bre.
In simple terms proponents
of the current legislation want
to assume that synthetic 昀椀bres
magically appear from a nice
clean machine, and do not pose
any problems to the environment by way of micron plastics,
and then magically disappear
into the ether once they have
been discarded.
Wool, on the other hand
doesn’t get credit for being a
natural, sustainable, renewable
昀椀bre which biodegrades at the
end of a garment’s long life.
Submissions to correct or
at least protest about the current form of this legislation are
complicated but can be done by
each and every person involved
in the wool industry.
Practically every wool-broking company from around the
world was in attendance at Adelaide, and so has the required
form to complete, and instructions to guide you through the
process.
Anyone who would like to
see their children be able to
farm and/or wear wool needs
to contact their broker immediately and get this form submitted before the April 28, 2024
deadline.
Damien Whiteley
District Wool Manager
Our Island,
Your Country.
Package discounting is available for
regular advertisers; call James
on 0449 178 715 to discuss.
TASMANIAN COUNTRY Friday, April 26, 2024 17