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Optimism amongst wool producers on show at premier merino event

2016 is shaping up to be a promising year for wool producers, according to agribusiness specialist Rabobank, with optimism evident in the strong line-up of studs entered in the Great Southern Supreme Merino Show and Sale on 23 to 25 January in Canberra.

Regarded as one of the state’s premier merino events, attracting producers from across NSW and into Victoria, Rabobank has thrown their support behind the event as the major sponsor for the past 14 years.

Rabobank Goulburn branch manager Richard Knight says this year’s 69th show is expected to attract close to 400 entries, as producers take the opportunity to benchmark their stock against some of the best in the state.

“As the first sale of the year, it really sets the standard for the stud industry sales and shows for the rest of the year, and that is why we see all the leading studs participate but also a large number of producers who come to see the best genetics on display under the one roof,” Mr Knight says.

“In the past, the sale has been highly competitive, and this year it should be pushed up by the positivity prevailing across the industry.

“Recent rains are indicative that the El Nino weather pattern has peaked and is now weakening, while the wool market finished last year around 20 per cent higher than the same period in 2014.”

Mr Knight says Rabobank is expecting wool prices to remain supported in 2016 by low supplies, with official forecasts pointing to a seven per cent drop in production in the 2015/16 season.

“Tough spring conditions across some key growing regions are expected to reduce the number of sheep shorn and average fleece weights,” he says, “but the volume of wool available in the market may be even lower than what is currently anticipated, with many growers selling off their stockpiles last year in response to strong prices.

“The low Australian dollar is also expected to provide support through 2016, with Rabobank forecasting the AUD/USD to trade at 66US cents by the end of 2016 and further weakening expected if US interest rates continue to increase.”

Mr Knight says that while Rabobank is expecting both of these factors to underpin prices over the coming year, the uncertainty prevailing in the Chinese economy and the importance of continued economic improvement in the Northern hemisphere remain potential risks to the outlook.

The show will take place at the Fitzroy Pavilion at the Exhibition Park, Canberra, on Saturday 23 and Sunday 24 January, followed by the ram sale at 11am on Monday 25 January.

Rabobank remains positive about the prospects for the sheep and wool sector, with the long-term sponsorship of the Great Southern Supreme Merino Show and Sale reinforcement of the bank’s support of the industry.

Rabobank Australia & New Zealand is a part of the international Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 115 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 40 countries, servicing the needs of approximately 8.8 million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand is one of Australasia’s leading rural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 94 branches throughout Australia and New Zealand.

Media contacts:

Denise Shaw
Head of Media Relations
Rabobank Australia & New Zealand
Phone: 02 8115 2744 or 0439 603 525
Email: denise.shaw@rabobank.com

Skye Ward
Media Relations Manager
Rabobank Australia & New Zealand
Phone: 02 4855 1111 or 0418 216 103
Email: skye.ward@rabobank.com