The group was making final arrangements with scour group Cavalier Wool Holdings for the wool to be processed at its Timaru plant, WoolsNZ chief executive Rosstan Mazey said.
The initial production would be enough to provide its spinning and manufacturing partners the resources for their own product development work.
“Once they’ve got their confidence in the wool, we’ll move to a supply programme for scoured wool if they are a spinner or yarn for a manufacturer for the commercial phase.”
WoolsNZ spent most of last year in due diligence work with the GlacialXT developer, Levin-based The Merino Co, and was really encouraged by the results, Mazey said.
The new “super white” wool would initially be for traditional uses – carpet, tufted rugs and upholstery – with existing customers but potentially could take crossbred wool into new territory.
He was confident it would make a difference to wool prices over time, providing colour and enhanced fibre qualities to match synthetic yarns.
The wool price was well below where WoolsNZ wanted to see it but some of its shareholders were still getting lambs’ wool prices on a par with last year before the slump in the market.
They were the shareholders who signed up for a lambs’ wool forward contract last winter, at about double the latest auction value.
In WoolsNZ’s latest bulletin to growers, one shareholder, who said he was too slow acting to get in on the deal, wrote that the contracts were “absolute gold” in a tumbling market such as this year’s.
“Lambs’ wool $3.50/kg above the spot market and second shear $1.kg above the spot market, that’s serious premium.”
Some shareholders on fixed contracts would be getting all of that.
Others, who were on stable price contracts, with a mechanism to balance out too much price volatility, would have downward adjustments to that top premium over what were hoped to be the lows of the spot market but would still be making very good money.
Mazey didn’t want to make too much of the gains made or give away details, saying what WoolsNZ was doing was to try to build up long term relationships.
“You can win some years and not win other times but the rationale is more certainty for growers over a longer term, not a month or a season but years.”
With prices looking like they might have bottomed, WoolsNZ would possibly be negotiating its lambs’ wool contracts this year on a rising market.
One WoolsNZ shareholder benefiting from last year’s contract, for delivery over this summer, was Banks Peninsula Wool Growers chairman Chris Chamberlain.
Like Mazey, he was keen to play down the gain over the spot price but he was well ahead for the year.
“Full credit to them – putting these contracts out before the lambs are even born for the wool being shorn in December through to February. It’s grown in volume and price every year over the years it’s been going and I’ve got no qualms about signing it.”
There was a very strict criteria governing wool quality and farmers putting a lot of pride into their shed handling and wool preparation would benefit most.
“If you haven’t got the right specs you don’t get the top dollar.”
The Banks Peninsula group went out on its own nearly a decade ago, frustrated with low wool prices and linked up with WoolsNZ when it was formed.
WoolsNZ chairman Mark Shadbolt was a driving force behind both groups and was still a director of the Banks Peninsula company.
It had its own wool supply arrangements with customers and shareholders supplied the WoolsNZ lamb wool contracts individually.
Chamberlain said there was price sensitivity around the relationships it had and the group preferred to get on with its business outside the public eye.
“But it’s given us more understanding about why we are still shearing wool and made us more aware of the market.”
