AN exclusive long-term contract has whet the appetite of a European fabric maker who is appealing to the very best Australian superfine woolgrowers to partner with them to help feed the growing demand for luxury and active wear fabrics.
There are only 20 members in the current Reda Future Project, set-up by 152 year-old Italian fabric maker Reda, who meet the quality standards of set by the country’s largest integrity scheme, SustainaWOOL.
Last year, Reda chief operating officer Francesco Botto Poala said the company acquired 1500 bales of 15.8 to 19.2 micron wool from this exclusive group, and they are hungry for more.
“We buy 22,000 bales annually so we would like to partner more closely with more like-minded wool growers,” Mr Botto Poala said.
“There is not enough wool at the moment available in the market with the characteristics we want and need, like quality, traceability, environmental sustainability and being non-mulesed.”
Currently, Reda acquires an estimated 4000 bales from New Zealand accredited under the ZQ program and 4000 SustainaWOOL bales – a large proportion of these via special grower contracts. The remaining 14000 bales is purchased through the Australian auction system
But Mr Botto Poala wants to shift this breakdown in favour of accredited wool.
“We hope to acquire all 18,000 bales from Australia as SustainaWOOL accredited - as fast as possible,” he said.
“With 700 farms now accredited under SustainaWOOL we are heading in the right direction.
“But we don’t have a magic wand: farmers don’t have magic wands.”
The Reda Future Project growers commit to delivering wool of the highest quality, as well as the highest credentials for animal health and welfare, social responsibility and environmental practices.
With the extra on-farm expectations came financial reward. with growers offered a three to five-year contract and receive prices from 15 to 35 per cent above the auction prices in the first year.
“The aim is to transfer the message from the market to a group of leaders and to work alongside them in projects that give to us, and to them, a future,” Mr Botto Poala said.
“The contract was the only way for us to give a premium to the professionals, the wool growing leaders, because in the market you couldn’t see the price difference”.
“There was not enough competition in the sale rooms to show them that we wanted to pay for what they were doing.”
Despite a 40pc increase in the spot prices in Australian this year, Reda Future Project woolgrowers were cushioned by a special weighted index which moves the contract prices based on the average prices season-to-season.
Members were forecast to get an estimated 20pc average increase in returns during the 2018/19 season.
“It gives supply security to us and price security for growers, and the contract will provide shelter for both of us if the market collapses,” Mr Botto Poala said.
He said while the manufacturing market was not ready to pay a premium, without wool integrity scheme’s the company would lose business.
“It is a clear trend – this is about listening to the needs of the market,” he said.
“Sometimes the market wants something when it is not ready to pay for it, but after all, it is the market and the consumer of our product.
“We are in the same boat so we need to row in the same direction.”