An online trading platform for New Zealand wool and other natural fibres, which aims to work like the GlobalDairyTrade market, will launch later this month.
The Natural Fibre Exchange (NFX), owned by Wools of New Zealand, Alliance Group NZ and Progressive Leathers Export and managed by CRA International, will run a mock trading event today ahead of the first trading event on May 22. The market will run with bi-weekly trading events similar to the GDT auctions, which CRA also manages, on Tuesdays at 2pm NZ time, a presentation published on the NFX website says.
NFX says its platform will provide direct access to product from sellers, enabling a competitive and fair marketplace and allowing price discovery. It won't charge any fees to buyers over the purchase price, although buyers and sellers will need to arrange shipping and other commercial terms themselves, and sellers will pay a joining fee along with a transaction fee per kilogram of fibre sold.
Before trading, each seller will specify their wool on offer, and may set a limit on the amount of wool which can be purchased by each buyer or restrict the buyers it is willing to sell to, along with a starting price, the presentation says. The bidding site will be opened two days before the auction so buyers can see the information. All parcels of wool will be offered simultaneously over multiple rounds of bidding, with buyers competing to offer the highest price.
"By establishing credible market-based prices, the platform provides industry participants with reference price information that improves the efficiency of the natural fibre marketplace," NFX says on its website. "Through the initiation of the NFX platform the intent is to provide a more convenient and efficient way for buyers and sellers to trade wool as well as other natural fibre products in the future."
NFX also lists ANZCO Foods and Lowe Corp alongside Progressive Leathers Export, Wools of NZ and Alliance Group NZ on its products and sellers list on its website.
Coarse wool prices slumped last season when China switched its preference to fine wool and away from strong wool that makes up the majority of the country's clip, leaving an overhang of stockpiles to sell in the current season. Prices remain comparatively weak, though the latest ANZ commodity price index reported wool prices rose 2.6 percent over April.