Last December, Mecardo investigated the high levels of premiums received for RWS-accredited 19.5-micron merino wool that occurred from mid-2021 to April 2022. Since then, the premiums have shrunk, especially for the average to broader merino categories. However, these high premiums stirred plenty of interest in the accreditation among growers, especially for clips that were already non-mulesed. The nature of agriculture is that changes in supply are restricted by the cycle of production, which tends to be an annual one for extensive farming in Australia. This means it takes a while for supply responses to show up in production.
RWS-accredited wool is non-mulesed by definition, so RWS volumes are a subset of the Ceased mulesed/non-mulesed (CM-NM) wool sold at auction which in turn is a subset of the total volume sold (in this case merino wool). Figure 1 shows the annual proportion of eastern Australian merino wool sales which were declared as CM-NM (non-mulesed) from 2014-2015 through to the current season for 15-17 microns, 18-20 microns, and 21-23 microns. The non-mulesed wool in this graphic includes RWS-accredited wool. Figure 1 tells us a couple of things. Firstly, the proportion of RWS-accredited wool increases as merino wool becomes finer. Secondly, the proportion of 18 micron and broader merino wool declared as non-mulesed has stalled since 2020-21 and only increased marginally for 15-17 micron wool.
If the proportion of merino wool declared as non-mulesed has stalled in recent seasons, what about RWS wool? Figure 2 shows, for the same merino micron groupings, the proportion of non-mulesed wool sold which has been accredited to RWS. It has climbed from around 5% of non-mulesed wool (which itself was only a small proportion of wool sold) in the 2018-2019 season to 34% of 15-17 micron non-mulesed wool this season (to date), 27% of 18-20 micron non-mulesed wool and nearly 20% of 20-22 micron non-mulesed wool. The premiums paid for RWS wool have encouraged a substantial proportion (still a minority) of non-mulesed wool to become accredited to RWS.
To put the supply of non-mulesed (excluding RWS) and RWS proportions in context, Figure 3 shows for the current season to date the proportions of the two categories by half-micron from 15 to 22 micron. For 15 micron (a small category by volume) 31% was non-mulesed and another 21% was RWS accredited. At the other end of the scale, 8% of 22-micron merino wool (in the eastern regions) was non-mulesed with a further 2% accredited to RWS. There looks to be plenty of scope for RWS volumes to increase, given the volume of non-mulesed wool sold and the minor proportion of non-mulesed wool which is accredited to RWS.
What does it mean?
The first message in this article is that the shift to non-mulesed merino flocks has stalled in recent seasons, with the proportion of average to broad micron merino stuck at low levels. The second message is RWS volumes have responded to the strong price signals of 2021-22. Non-mulesed wool accredited to RWS proportions has grown, with scope for more growth as the proportion of non-mulesed wool sold with RWS accreditation ranges from only one-fifth to one-third, depending on the micron category.
- The proportion of non-mulesed wool in the eastern Australian merino clip has steadied in recent seasons.
- The proportion of non-mulesed wool accredited to RWS has increased markedly in recent seasons but remains in the 30-35% range.
- There is further scope for the proportion of non-mulesed wool accredited to RWS to increase.
Click on figure to expand
Click on figure to expand
Data sources: AWEX, ICS, Mecardo