Most of the Canadian wool clip for 2010 has been marketed by negotiating forward contracts throughout the year to a network of buyers in China, U.S., India, Uruguay and domestically, says Eric Bjergso, general manager of the Canadian Co-operative Wool Growers Ltd. (CCWG).
“Our finer wools have made significant price gains this year, the coarser wools have also improved but to a lesser degree. I am optimistic about the future prospects for wool, at this time it looks very promising for improved financial returns on all wool types,” he said.
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Last September the CCWG participated in the Nanjing Wool Market Conference and Trade Show in Beijing, China with a Canadian wool display.
“This conference is attended by over 600 wool industry leaders and provided us with an excellent opportunity to again present Canadian wool to an international audience,” said Bjergso.
The international wool market has been in recovery mode since the wool market collapsed in late 2008 when the global economic crisis dragged the wool textile industry down with it, said Bjergso. In 2010 the wool market is making steady progress and there are positive fundamental signs that wool consumption and demand are increasing.
“Having said this there are wool supply chain concerns for the future with global sheep numbers continuing to decrease. “Last year world wool production fell by 7.5 per cent and is projected to fall by a further two per cent this year for major sheep-and wool-producing countries. Next year it is anticipated that sheep numbers will stabilize or increase slightly as production increases due to high sheep meat prices and better wool returns,” he said.
The Far East including China and India continue to be the major destination for global wool processing with China purchasing in excess of 60 per cent of all wool produced. Over 90 per cent of the world’s top-making capacity and more than 50 per cent of global spinning and weaving is provided by hundreds of factories across China.
Grower programs
At the grower level the CCWG has developed a loyalty reward program for CCWG shareholders that are also wool shippers. The Shareholder Wool Shipper Reward Program is a profit-sharing rebate that is based on the net weight of the current year’s wool clip at a pre-determined rate in cents per pound. “This will be an added bonus for shareholder/wool shippers in addition to the standard shareholder benefits such as the dividend, discount plan etc.,” said Bjergso.
The CCWG will also be offering another incentive program called the Wool Preparation Incentive Rebate. The objective of the incentive is to reward producers with a bonus for those who have taken the time and effort to present a clean, well-prepared and -packaged wool clip for grading and marketing.
“At the time of wool grading, our wool grader assesses if the producer’s clip qualifies for the five-cent bonus, depending on the quality and presentation of the wool clip,” said Bjergso. Eligibility is based on bright, high-yielding wool clips that have been well prepared and skirted with offsorts separated from main fleeces by a newspaper divider or packaged in a separate bag.
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“Our finer wools have made significant price gains this year, the coarser wools have also improved but to a lesser degree.”
ERIC BJERGSO, CCWG
