Wool

Marketing

Australia

About 85% of wool sold in Australia is sold by open cry auction. 'Sale by sample' is a method in which a mechanical claw takes a sample from each bale in a line or lot of wool. These grab samples are bulked, objectively measured, and a sample of not less than 4 kg is displayed in a box for the buyer to examine. The Australian Wool Exchange conducts sales primarily in Sydney, Melbourne, Newcastle, and Fremantle. About 80 brokers and agents work throughout Australia.

About 7% of Australian wool is sold by private treaty on farms or to local wool-handling facilities. This option gives wool growers benefit from reduced transport, warehousing, and selling costs. This method is preferred for small lots or mixed butts to make savings on reclassing and testing.

About 5% of Australian wool is sold over the internet on an electronic offer board. This option gives wool growers the ability to set firm price targets, reoffer passed-in wool, and offer lots to the market quickly and efficiently. This method works well for tested lots, as buyers use these results to make a purchase. About 97% of wool is sold without sample inspection; however, as of December 2009, 59% of wool listed had been passed in from auction. Growers through certain brokers can allocate their wool to a sale and at what price their wool will be reserved.

Sale by tender can achieve considerable cost savings on wool clips large enough to make it worthwhile for potential buyers to submit tenders. Some marketing firms sell wool on a consignment basis, obtaining a fixed percentage as commission.

Forward selling: Some buyers offer a secure price for forward delivery of wool based on estimated measurements or the results of previous clips. Prices are quoted at current market rates and are locked in for the season. Premiums and discounts are added to cover variations in micron, yield, tensile strength, etc., which are confirmed by actual test results when available.

Another method of selling wool includes sales direct to wool mills.

Other countries

The British Wool Marketing Board operates a central marketing system for UK fleece wool with the aim of achieving the best possible net returns for farmers.

Less than half of New Zealand's wool is sold at auction, while around 45% of farmers sell wool directly to private buyers and end-users.[29]

United States sheep producers market wool with private or cooperative wool warehouses, but wool pools are common in many states. In some cases, wool is pooled in a local market area, but sold through a wool warehouse. Wool offered with objective measurement test results is preferred. Imported apparel wool and carpet wool goes directly to central markets, where it is handled by the large merchants and manufacturers.[30]


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