European wool processors visual appraisal warning

European wool processors visual appraisal warning


Wool
Vitale Barberis Canonico raw wool buyer Davide Fontaneto.

Vitale Barberis Canonico raw wool buyer Davide Fontaneto.

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A MAJOR Italian buyer has pleaded with the Australian wool industry to retain the visual appraisal of wool as the auction system braces for a shake-up today (Thursday).

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A MAJOR Italian buyer has pleaded with the Australian wool industry to retain the visual appraisal of wool as the auction system braces for a shake-up today (Thursday).  

Vitale Barberis Canonico raw wool buyer Davide Fontaneto said the 353 year-old Italian textile maker would not purchase from the Australian wool auction if visual appraisals were abolished.

“We could never support a selling system that doesn’t allow us to touch the wool before putting a price (forward),” Mr Fontaneto said.

“We buy the wool fibre based on the style of the wool; we are strongly in favour of the physical inspections of the lots because we don’t buy numbers, we don’t buy a commodity, we buy wool.

“Wool is a live material; it is not a piece of iron.”

During the recent VBC wool excellence awards, Mr Fontaneto said he had concerns with potential changes to the auction system.

“The auction system is the most transparent market, it is clear to everybody what the value of the goods that are sold in the auction,” he said.

“The big (concern) with an electronic portal will be the loss of the emotional aspect in the bidding room because a buyer might change their own limits after looking at the reaction of their competitors.”

His comments come as Australia Wool Innovation board of directors’ receive recommendations from the Wool Exchange Portal working group at Thursday’s board meeting in Sydney as to whether the WEP will be pursued.

The WEP was the chief recommendation in the Wool Selling System Review (WSSR) released earlier this year.

The final WSSR report suggested the WEP would reduce transaction costs, digitise the exchange of wool and create greater transparency throughout the sales process.

The WSSR panel reported the appraisal of wool at auction was a “gold plated” and “Rolls Royce” system involving objective testing, physical display of the sample and multiple inspections.

A number of the WSSR proposed selling alternatives remove the need for mandatory sample inspection.

Fairfax Media understands there is strong board support to sell the national clip online, however visual assessment had been a contentious issue among the WEP’s steering committee.

New England Wool managing director Andrew Blanch said the company's owners, fine Italian fabric makers Rada and VBC would only pay the current high premiums for certain types of Australian wool if there were visual assessments.

“We can’t commodify the whole Australian wool clip,” Mr Blanch said.

“We’ve got these contracts for particular types of wool and preparation – there is no way someone else’s evaluation could allow us to place premiums with confidence.​” 

The contracts we have out there, whether they are VBC or another, are up to 50 per cent above the market – the better the wool the higher the price.”

He said the mentality of using numbers in the auction system over visual appraisals had already “dumb down” the auction system.

“These better wools were only bringing in 10 cents more or less than the commodity price because people couldn’t appreciate what they could do,” Mr Blanch said.

“As a result we have had to put something in there artificially (direct contracts) so growers have the incentive to keep growing these traditional types.”  ​

Vitale Barberis Canonico raw wool buyer Davide Fontaneto.

Vitale Barberis Canonico raw wool buyer Davide Fontaneto.

The story European wool processors visual appraisal warning first appeared on Farm Online.

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