Mecardo Analysis - CM-NM volumes in 2018-19

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By Andrew Woods | Source: AWEX, ICS. 

Key points

· CM-NM Merino fleece proportions are low in Western Australia (4% in 2018-19).

· In eastern Australia, the proportion of CM-NM rises as fibre as micron decreases.

· Pain relief is more broadly spread across the main micron categories in both Eastern and Western Australia.

Mecardo was asked to look at the price effect of CM-NM (not mulesed) declarations on greasy wool prices. In such an exercise the first thing to look at is the supply of CM-NM wool, as meaningful supply is integral to mills having the ability to put together commercial batches. This article looks at the supply of CM-NM and PR wool last season.

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The proportion of CM-NM wool varies by micron category and region. Figure 1 shows the proportion of Merino fleece sold in eastern Australia in 2018-19 by micron category. The circles for each micron category reflect the proportion of eastern Merino fleece supply accounted for by that micron category. The 13 micron category had the highest proportion of CM-NM wool (91%) but is it only accounted for 0.003% of Merino (clean basis) eastern sales. 21.5 micron had the lowest proportion at 3.4%.

As a rule, the proportion of CM-NM rises as the fibre diameter decreases, from a base of 6-10% for the broad Merino categories. Overall 13% of Merino fleece sold in eastern Australia in 2018-19 was declared as CM-NM. Figure 2 trims the sub-15 micron categories from Figure 1. It does this to better show the rising proportion of CM-NM wool from the 21-22 micron categories.

In Western Australia, only 4% of Merino fleece sold in 2018-19 was declared as CM-NM. Figure 3 shows a breakup of western sales, with some significantly higher proportions for the fine and broad ends of the micron range which have small volumes.

Figure 4 shows the proportion of Merino fleece wool sold in 2018-19 declared to have used pain relief by micron category. Overall some 45% of eastern Merino fleece was declared PR and in Western Australia, the proportion was a smaller 25%. The proportion of PR wool is much more evenly spread across the micron categories in both eastern and Western Australia, albeit at different levels.

From this data it can be seen that putting CM-NM mill consignments together in Western Australia is difficult as only I in 25 bales of Merino fleece wool is declared CM-NM, and that is before all the normal specification requirements (micron, length ,strength, mid-point break, yield, vegetable fault and so on) are taken into account. In the east, broad Merino micron categories pose a similar problem. However, the finer micron categories are offering some useful volumes for mills to choose from.

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What does this mean?

The supply of CM-NM in Western Australia remains at low levels and makes the construction of mill consignments that avoid mulesed wool much more difficult. In eastern Australia the supply of CM-NM wool rises as fibre decreases which chimes in with the European demand for such wool. At this stage the proportion of the big fine micron categories 18-17 micron remains around 12-17%, with the proportion for sub 17 micron wool rising from around 23% to 90% at the bleeding edge of the micron distribution. There is scope in these micron categories for the supply chain to plan to use CM-NM wool from Australia.

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