WITH the opening of the 2012 wool selling this week in eastern Australia, Westcoast Wool managing director Luke Grant warned the next year would be the biggest test for the Australian wool industry.
Mr Grant said during the break there had been a fair amount of inquiry for the late January and February delivery of wool.
"Some of the mills had not bought quantities of wool at the end of last season and still had some early commitments this year left to fill," Mr Grant said.
"The dollar is going to be a touch higher and quantities of wool available will be a bit more.
"It seems there is a bit of wool that has come out of the woodwork but right now for January and February we will have some very reasonable markets, mainly due to what has been sold."
As the Australian wool market has always shown, the overall outlook for the year is often hard to predict because of the market's ability to fluctuate so much, and while Mr Grant reiterated this, he held hopes of a good market outlook.
"I don't think anything disastrous is going to happen this season," he said.
"This season I don't think you will see huge lifts in price.
"We may see a little rise every so often when there is a squeeze in supply which may cause wool to hover and bounce sideways slightly throughout the season.
"The real test will be the take up of where prices are with top makers next season.
"That will be the true test of where the market is and whether people will be able to continue to pay premium prices for wool or whether the economic conditions in Europe and the slowdown of China are going to really affect prices.
"I think it's going to have some impact and while we have held up pretty well, quantities will be an issue"
Wool Agency wool manager Andrew Johnson expected the outlook to be slightly less clear cut and that it would be interesting to follow quantities of wool available.
"One thing we have in our favour is that supply will cushion us somewhat from bad economic news," Mr Johnson said.
"We have had the largest clean-out of wool from sheds nationally with the price rise last year and I suspect this year we will get some sort of snapshot of what could be the true production levels of wool in Australia are.
"At the moment we are floating at lower quantities, which puts us well and truly at the lowest volumes of wool in Australia in a long, long time and how that transpires with production is anyone's guess.
"We have had poor lambing percentages in some parts and I don't think you're having people rushing back into buying sheep and putting the necessary infrastructure back in.
"What we are seeing is our clients in the wool game are lifting their numbers and changing their production profile, doing things like putting in less crop and more sheep, and how it all translates is anyone's guess.
"Not having the stockpile hanging over our heads that we had over the last 20 years certainly helps things."
Mr Johnson also said that some mills had not bought quantities of wool at the end of last season and still had some early commitments left to fill this year.
"The market opened 20c to 40c dearer than at the close of sales last year and so maybe those figures relate that push in the market," he said.
"That would certainly tie in with those shipping dates of late January early February.
"In my opinion there will still be quite a bit of volatility in the market for a long time.
"There is no stockpile and the supply pipeline is relatively empty, so wool with its supply issue holds us in good stead."
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