Fears new ‘Mini Wool Board’ could manipulate markets

Customers around the world and the trade in New Zealand fear that Wool Partners International will become a mini Wool Board and try to manipulate the market.

The old Wool Board tried to dictate how much customers should pay by setting prices well above the world market. It ended up buying auction wool and building a huge stockpile.

Inevitably the Wool Board ran out of money and when it suddenly dropped its floor price customers around the world and exporters in New Zealand were left with stock then valued at a fraction of its purchase price.

The artificially high prices, the lack of supply and the devalued stock caused enormous industry problems and led to many long term customers going broke or getting out of wool in favour of synthetics. Many never returned to wool.

Those that remained wool loyal are very wary that it will happen again with Wool Partners International. Other examples of disruption to the marketplace caused by levy-funded failures included the great acquisition debate, Woolnet selling system that didn’t work and the Strongwool Company which failed before it got off the ground.

There aren’t many overseas customers left and the only way Wool Partners International can get into the market is to undersell existing exporters by offering wool at cheaper prices.

Right from the start chairman of Meat & Wool NZ and the Wool Industry Network has talked about consolidating and controlling the clip with the intention of being able to manipulate supply and prices. 

The industry can’t just shrug its shoulders and let Meat & Wool sanctioned Wool Partners International get up and running, only to then fail.

A failure of this scale would further erode grower confidence in sheep farming and would decimate wool processing in the last remaining mills around the world.