The Country 31/07/26: Rachel Shearer talks to Jamie Mackay

The GM of PGG Wrightson Wool is disappointed but not surprised by the recent sharp fall in the Strong Wool Indicator. 

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Episode Transcript

Speaker 1 (00:00):
Let's talk Wall on the country. Rachel Sharer is the
GM of PGG Rights and Wall and Rachel. This has
been one of the success stories of the early part
of twenty twenty six. You can't defy gravity forever. The
last sale or the sale in mid July was down substantially.
Yesterday's sale, which is still kind of happening because there's

(00:20):
a big back catalog to get through down again, very
very disappointing. But are you surprised by this?

Speaker 2 (00:27):
Look when we're probably not surprised. I hate to say it,
but the dream run really you know, those constant price
hikes went up. The market went up incredibly fast, and look,
it's what we're seeing across other markets as well. And
with this new season starting, we really have seen that
market wee can significantly. But the good news Jamie is

(00:48):
you know, we're still two dollars ahead of where we
were this time last year, so we've we've got to
put things into perspective a little bit as well.

Speaker 1 (00:53):
Yeah, we need to bank those gains now. This market
drop off or whatever. How much do we blame Trump?
How much do we blame China or India for just
filling up their boots? Or their books and then pulling
out of the market.

Speaker 2 (01:07):
Look, I'd have to say quite a lot. The market
was really over sold, especially through April, May and June,
and now that those buyers have filled those forward commitments,
they're really stepping back and they're choosing not to enter
the market at the moment, so forward sales, you know,
are really limited. We are seeing and hearing out of Europe.

(01:29):
We're writing some new business up there. The woolen mills
are coming back off their traditional summer break, and we
know that they're not covered as much as what they
have been in the past, so there's probably still quite
a lot of business to write. But at what price,
that's the that's the really big question. And with predominantly
China sort of pulling out of as prompt market and
just taking a wait and see approach, we're just we're

(01:51):
needing to find out what that new level is across
the globe.

Speaker 1 (01:55):
Really, I hope I'm not speaking out of turn here,
but you told me in the commercial break that a
formal life before being the GM of wall for PGG Rights,
and you worked in the coal industry for solid energy,
and you have the same issues with China. They've been
trading for ten thousand years or more. Rachel, They're actually
better at it than us.

Speaker 2 (02:15):
Yeah, this commodity swing is very well known, and you're
absolutely right. A very different commodity with the coal that
we were exporting up into China, but very similar story
as far as filling orders and then pulling out of
the market and watching that price come back down again
to reach a new normal. I guess. So, look, I

(02:37):
think volatility is likely to remain. The fundamentals at the
bottom of it, all of reduced supply, have not changed.
You know, our wool production continues to decline, so we
will see some more supply squeezes in the future, which
you know, there's going to be continued price volatility, that's
for sure. But I keep going back to the good,
hard working sheep farmers of New Zealand, and alongside the

(03:00):
increased lamb and sheep prices, the economics from a whole
of sheep perspectives, you know, taking into account wall as well,
are substantially better than they have been for a very
long time, aren't they. So that's got to be a
good story.

Speaker 1 (03:11):
Absolutely in the old days, this would have been a
low period of volume and wall cells but our sharing
patterns have changed over the years. So what are the
volumes like at this time of the year, in the
middle of winter.

Speaker 2 (03:23):
The volumes coming forward are pretty good, you know, sort
of eight and a half thousand bales from the national option,
this last option, we'll be heading into the first fine
wall sale and about the three weeks time August the twentieth,
so seeing that will come forward will be interesting. The
Australian market has also fallen back a little bit, which

(03:47):
we follow quite closely as far as the fine wall goes.
But we're expecting a pretty strong fine wall season ahead.
But look the wall that's coming forward, it's good production,
good color, there's real soundness in the wall. The wall
that's been produced on farm this year is a really
good quality. We just need to see buyers re entering

(04:08):
the market.

Speaker 1 (04:08):
Well, we'll discuss that next month and we have another
look at the wall markets with PDG Rights and Rachel Share.
Thanks for your time and enjoy your weekend.

Speaker 2 (04:16):
Thanks Jamie, have a good one.