Web wool exchange pursued
THE unanimous recommendation by the Wool Exchange Portal (WEP) working group to establish an electronic trading platform will dawn a “new era” for woolgrower transactions, according to Australian Wool Innovation (AWI) chairman Wal Merriman.
At Friday’s annual general meeting, held in Sydney, Mr Merriman announced the AWI board had accepted the move to develop the WEP - an online information and trading platform - which was the chief recommendation from the Wool Selling System Review final report released in January.
“It will be a new era for growers’ transactions,” AWI chairman Wal Merriman said.
During the meeting, working group chairman Will Wilson, Australia Investor Relations Services, told the crowd of shareholders the WEP would be the primary online entry point for woolgrowers to access industry information, wool testing and market data, as well as trading options.
“The development of the WEP was not intended to crowd-out other industry innovation, rather to encourage industry innovation and indeed to connect with it,” Mr Wilson said.
The proposed WEP will include a ‘Bulletin Board’, which will list all wool assessed by the Australian Wool Testing Authority (AWTA) to be offered for sale.
The working group’s proposal included a national woolgrower registration system, similar to the grain growers’ registration, and act as a data repository for all AWTA current and historical data of wool tested and Australian Wool Exchange market information.
“While all that information is available somewhere it is very difficult for growers to get it and then manipulate it to make more informed decision,” Mr Wilson said.
Information on marketing options, including open cry, private treaty, AuctionsPlus’ Wooltrade and forward trading, will also be included on the WEP.
Mr Wilson said the system would enable woolgrowers to enter the wool specifications which would then provide information on optimal selling options for that type of wool.
It is intended the WEP will digitally operate in conjunction with the open cry system to enable electronic bidding.
“The group saw benefits in retaining the current auction system but you do need to expand the ability to access that market electronically,” Mr Wilson said.
“If the WEP will provide choice to all selling options it really needs to have the ability to access the open cry auctions electronically.
“It needs to be investigated as to whether there is the technology there now that won’t compromise speed? There needs to be more work done.”
Mr Wilson said the working group - made up of woolgrowers, wool brokers, exporters and banking and trading professionals, called for greater collaboration between the three main industry institutions AWI, AWEX, and AWTA.
“The working group believes for the WEP to deliver on its objective it would need to be a joint initiative of these three institutions,” he said.
Despite the Bulletin Board offering the potential for woolgrowers to trade directly with exporters on the WEP, Mr Wilson said the role of wool brokers was key to the success of the WEP.
“… Brokers should be seen in the same light as the woolgrower as it is often the wool broker that delivers the wool for sale,” he said.
Mr Wilson said the physical appraisal of wool and current “best practice” wool testing would not be compromised by the WEP.
“While competition, testing and further innovation would be encouraged under a WEP regime, it is critical these existing standards are adhered to as a minimum to ensure the existing global wool client base continue to purchase wool in confidence,” he said.
AWI chief executive Stuart McCullough said the WEP would create transparency and increase competition.
“We think there are a range of opportunities this will deliver but we have some staging to go yet,” he said.
A cost analysis and business plan will be delivered by the working group at AWI’s April 2017 board meeting.