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Wednesday, 30 August 1989
Page: 602

Senator BUTTON —Yesterday, on 29 August, Senator Chapman asked me a question about the proportion of wool purchased at auction in the financial year 1988-89 by the Australian Wool Corporation (AWC). I undertook to obtain an answer to the honourable senator's question as quickly as possible. The proportion of wool purchased at auction by the Australian Wool Corporation in1988-89 was 5.2 per cent of the total offering. The rate of AWC purchases was 16.4 per cent in June 1989 and 39.2 per cent in July 1989, and amounts to approximately 45.3 per cent so far this month. That tallies with some of the figures in the honourable senator's question. But the annual wool selling season commences in July each year and tends to follow a seasonal pattern. Traditionally, demand is weaker in the earlier months of each selling season because overseas buyers are not normally as active then, with many processors being closed during the height of the northern summer season.

So far this season the trade has purchased approximately the same quantity of wool as at the same stage of the season last year. However, increased production of wool, coupled with delays in shearing because of wet weather at the end of last season, has resulted in an increased volume of wool being put on the market in recent weeks. Buyers therefore have greater choice in their purchases. In addition, high overseas stockpiles, notably in Japan, have resulted in reduced activity by Japanese buyers. China and Russia are also not active in the market at present, primarily because of foreign currency shortages. However, the Australian Wool Corporation expects both China and Russia to re-enter the market in the coming months, and as overseas stockpiles are reduced other overseas buyers will become more active, which is expected to result in the market moving more in the seller's favour.