Australian Wool Exporter Ceases Wool Trade
August 15, 2014

Ongoing poor demand for greasy wool combined with diminished margins in an over-competitive trading environment has led to Queensland Cotton (QC) Wool's parent company, Olam International, to make the decision that it will wind down its wool trading activities over the coming months.

The unforeseen drop in demand for greasy wool, particularly into its main trading partner China, has made it extremely difficult for the trading team to achieve a satisfactory return on capital expenditure when compared to Olam's considerable range of other commodities.

QC was one of Australia's leading wool export companies, selling on about 150,000 bales annually. The move follows Landmark's 2013 decision to cease its Dalgety and Viterra wool exporting operations.

"The short term issues for us are that our biggest single trading partner is China," wool general manager Michael Avery says. "And it's well documented that the China economy is slowing and certainly there is a lot more credit constriction in China, which has reduced their ability to take on wool."

Avery said the company was sitting second or third in Australia in terms of export wool volumes. Even as number two exporter, Olam was only exporting seven percent of the Australian wool clip.