Short staple length merino fleece price percentiles

Nutrien Ag Solutions wool shearers.

Most decile tables of wool prices are based on AWEX indicators (MPGs) which works for the majority of wool sold, as full length merino fleece makes up the bulk of wool income. For those shearing more often and producing shorter staple length wool (as South Africa does) this article takes a look at price percentiles for 60 mm length merino fleece.

The South African merino clip (view last weeks’ article), is centred on a staple length of 60 mm, which is short by Australian standards. In January Mecardo looked at the proportion of short staple (prem) fleece produced for broader merino wool, showing that 10-15% of 21 micron wool sales in Australia were now in the 50-69 mm staple length range. With such volumes of prem wool being produced a look at the price percentiles as well as micron and premiums and discounts seemed worthwhile.

Table 1 shows the 10 year price percentiles (deciles) for the prem length (greasy staple 54-63 mm) merino fleece sold in eastern Australia, with vegetable fault below 2% and no subjective faults (such as water colour and cott). In addition RWS accredited wool has been excluded (apologies to any South African readers). In terms of the current percentile rank the prem fleece follows the general lead of the MPGs but at slightly lower levels, as shown in Figure 1.

In Table 2 the premiums and discounts for the different micron categories in relation to 19.0 micron are shown, again with a 10 year lookback. The percentile ranks for the micron premiums and discounts follow a similar pattern to the AWEX MPGs at present, with very high premiums on the finer side and quite low discounts on the broader side of 19.0 micron.

Given the topical nature of quality integrity schemes and associated premiums, especially for RWS accredited wool, average prices for the past couple of weeks (August 2022) are shown in Figure 2 for non-RWS and RWS accredited prem length fleece, by micron category. A full 10 year percentile table is not possible as RWS and associated premiums have only become material in the greasy wool market during the past couple of years. Figure 2 shows solid RWS premiums for the prem length merino fleece across the micron categories, ranging from 140 to 400 cents per clean kg. Keep in mind that pricing for 60 mm length wool can vary according to the staple length “seen” in a lot by exporters.

What does it mean?

The shorter staple length merino market reflects the structures seen in the larger, long staple market in terms of price levels and relative prices (micron premiums and discounts). In addition RWS premiums are also comparable to the longer staple market, which should not be a surprise given the premiums published by Cape Wools, where the merino supply is centred on 60 mm length wool.

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Key Points

  • 10 year price percentiles for 60 m long merino fleece are running at levels slightly lower than the price ranks for comparable AWEX MPGs.
  • Micron premiums and discounts for the prem length fleece are large, reflecting the general pattern seen in prices for full length wool.
  • RWS premiums are operating in the prem merino fleece market on par with this seen in longer staple prices.

Click on figure to expand

Click on figure to expand

Click on figure to expand

Click on figure to expand

Data sources: AWEX, ICS 

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