The wild fluctuations in the market means many farmers are having to gamble on good conditions when taking their wool to auction.
Woolgrowers Independent Selling Services wool manager Robert Ellis said the unstable price was being caused by two big factors.
“A lot of this is volume related and shipping deadline affected,” Mr Ellis said.
“Almost 98 to 95 per cent of Australia’s wool goes to China and when you’re sending over 40,000 bales to them it can be a little bit too much for the wool market in China to absorb. The phones will go quiet.”
COVID-19’s effect on international freight is making the tricking game of striking the market at the right time even harder.
“Normally it takes two weeks to get the wool to the wharf but now it can be up to three weeks in transition,” Mr Ellis said.
He said the best option for wool growers in the current market was to engage with online sale platforms such as AuctionsPlus.
“Getting your wool in at the right time is very hard at the moment, because by the time it gets in the price can fall out the bottom of the market,” Mr Ellis said.
“If you use something like AuctionsPlus you can put it up there and put your minimum sell price in and stick by it.”
Mr Ellis said farmers should be protecting their valuation at the moment and walking away from low-ball prices.
“Be a price maker not a price taker.”
China’s harsh tariffs and trade disruptions on other Australian primary industry products are also in the “forefront of everyone’s mind” according to Mr Ellis.
“We have been lucky and they seem to be targeting everyone but us at the moment, but it is an issue we’re watching.”
The Australian Bureau of Agricultural and Resource Economics and Sciences September quarter natural fibres report said: “COVID-19 control measures have reduced consumer demand for apparel and disrupted all parts of the clothing supply chain, driving up stocks of unsold textiles and raw fibres. As a result, wool prices are forecast to fall to 12-year lows.”
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