WILL 2011 be the year of the superfine?
Australian Superfine Wool Growers' Association president Helen Cathles thinks it well may be.
And she has reason to be confident, as prices for superfine wool, 18.5-micron and finer, rallied in December to their highest rates in nearly 10 years.
At the close of trading on December 16, AWEX's 18-micron southern indicator was at 1618c/kg while 17-micron was at 1774c/kg.
These rates were equivalent to $11/kg greasy for 18-micron and $12.40 for 17-micron.
Compared to the benchmark 21-micron, 18-micron wool is now trading at a 60 per cent premium.
A year ago that premium was less than 25 per cent.
The last time 18-micron was over 1600c/kg was in early 2001 when an Australian dollar was worth only US50c.
In the intervening years, superfine and ultrafine wool have endured downturns by the Italian specialty processors, a rising Australian dollar, a global financial crisis that stymied the demand for worsted suiting and a seemingly never ending drought that foisted "hungerfine" wools on to the traditional superfine supply.
It was a downturn that forced many wool growers to change their classing objective, away from going finer to one of boosting fleece and body weights.
"Those who are left are real superfine wool producers," said Mrs Cathles.
The "real" producers were those who were running flocks genetically bred to produce superfine and who followed strict guidelines for classing their clips.
Mrs Cathles said the lift in superfine prices was desperately needed to keep young families in the industry.
Mrs Cathles said the message from the mills was one of optimism.
She said that optimism would be reinforced by Australian Wool Innovation's Woolmark Gold promotions in China and the universal Merino No Finer Feeling Merino campaign.
European processors had not only returned to the market but were now having to compete with Chinese processors who were beginning to use both superfine and ultrafine wool, she said.
Adding to the strength of superfine prices was the realisation that the total supply of 18.5 micron and finer wool was down 17.5 per cent based on AWTA testing throughput to the end of November.
Superfine production, boosted by supply of hungerfine wool, was at a record 435,000 bales or 21.1 per cent of the total clip.
Wool sales will re-open next Tuesday, January 11.
