The issue of mulesing continues to be top of mind among apparel brands and their purchasing decisions. For Australian wool growers, this raises the issue of whether to mules or not, and then how to secure some benefit if the decision is made not to mules. This article takes a look at the interaction between quality scheme accreditation and non-mulesed status at Australian greasy wool auctions.
In September Mecardo looked at RWS premiums showing how
premiums for merino wool had picked up slightly after a period through 2023 of
low premiums compared to those of 2022 (read more here).
This was the case in both South Africa, where Cape Wools regularly reports what
they call certified sustainable wool premiums (read here), and in Australia.
One of the challenges in calculating the price effect of
quality systems is the overlap in accreditation for wool sold (clean basis) at
auction in Australia. Figure 1 shows the proportion of merino RWS-accredited
lots which were also accredited to Authentico and SustainaWool sold this season
to date. For 16 micron and finer the overlap between RWS and Authentico is very
high (over 60%). For 17 to 20 micron the overlap drops to a still substantial
40-50%, and then falls below 20% for 21 – 23 micron. The overlap for
SustainaWool and RWS is much lower, reflecting the smaller proportion of
SustainaWool accreditation (about 1% of merino wool compared to 5% each for RWS
– which is moving to the Material Matter Standard (read more here) and
Authentico)). In this analysis, the three quality systems have been combined.
Figure 2 compares non-mulesed “indicator type” merino wool
with no quality system (no RWS, Authentico or SustainaWool) accreditation and
comparable wool that was flagged as mulesed, had pain relief or not declared
for the season to date. The graphic shows the median effect plus the range for
14.5 through 22 micron in half-micron increments. Basically, there is a very
small median effect for the 15.5 micron and broader micron categories. For the
14.5 and 15.0 micron categories, the median premium is in the 2.5% to 3.5%. The
minimal price effect indicates that growers do not get much acknowledgment of
having delivered non-mulesed wool to sale when there is no accompanying quality
system accreditation.
Figure 3 looks at the difference between non-mulesed wool
with a quality scheme accreditation and non-mulesed wool without accreditation,
for merino indicator style fleece sold this season to date. For 16 micron and
broader the median effect varies between 1.3% and 4.2%, while for 14.5 to 15.5
the effect ranges from 5% to 10%. While the methodology used here is of a low
level, it shows that achieving a significant premium (on average) for
non-mulesed merino wool requires accreditation to a quality scheme.
The other wool category where feedback indicates an unmet
demand for RWS accreditation is crossbred wool. For the season to date, 1.6% of
full-length crossbred fleece was accredited to RWS and 1.4% to Authentico.
Interestingly If the New Zealand crossbred wool sold in Melbourne is included,
the proportion of RWS wool rises to 10% for the season.
Figure 4 compares RWS-accredited non-mulesed crossbred
fleece with comparable non-RWS non-mulesed wool sold this season to date, from
23.5 to 33 micron. The median price effect ranges from 2% to 12%, with the main
micron categories by volume – around 27-29 micron – achieving premiums in the
9% to 12% range. Clearly, there is demand for quality scheme accredited
non-mulesed crossbred wool.
What does it mean?
As retail brands seek to present themselves using ethically responsible raw materials, the challenge for raw material suppliers such as wool growers, is to provide a reliable, trusted process for the supply chain to meet this need. Quality schemes, notably RWS, have moved into this role. The premium calculations shown in this article indicate the reliance of the supply chain on quality systems to, in this case, prove wool used is from non-mulesed sheep.
Key Points
- For non-mulesed merino fleece to achieve useful premiums at auction requires accreditation to a quality scheme.
- The premium increases markedly for wool finer than 16.0 micron.
- Crossbred prices also show premiums for quality scheme-accredited non-mulesed wool.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: AWEX, ICS, Mecardo
