Australia washes its hands of wool stockpile
By Boyd Champness
AUSTRALIAS wool stockpile will start flowing back on to the market from 1 July following the Federal Governments formation of a new company, WoolStock Australia, to replace Wool International (WI).
The new company, which will be grower-owned, will try to limit its impact on the fresh wool market by restricting its sales to 15,000-20,000 bales a quarter until the end of the year, according to the Stock and Land.
There are 1.05 million bales in Australias stockpile, which is having a negative effect on world prices.
Growers will receive one share in WoolStock for every unit of entitlement they own in WI.
The tabling of legislation last week to create WoolStock from WI sees the Australian Government end its involvement in the stockpile headache.
It also signals an end to the long period of uncertainty for the stockpile, which began with the initial stockpile freeze in August 1998.
Wool Industry Advisory Board head Don McGauchie said WoolStock would take a more commercial approach to selling the stockpile than its WI predecesssor, which tried to maximise value instead of maximising returns to shareholders.
“We will disclose our dealings to the same extend that a private company is prepared to disclose to us their dealings,” he told The Weekly Times.
The Wool Industry Advisory Board was set up at the end of last year to find solutions for the struggling industry after woolgrowers passed a “no confidence” motion in the grower-funded Woolmark Company – the body responsible for marketing and selling Australian wool.
The Wool Industry Advisory Board represents the 31st inquiry into Australias wool industry since 1961.
More than 25% of woolgrowers have left the industry over the past decade.