The futures contracts represent a significant development for the Australian wool industry as they are based on the dominant Chinese export market specifications, widely traded in Australia and internationally.
China has grown in recent years to become the largest importer of Australian wool, importing around one third of the total clip. This is the first time listed futures contract specifications have been based on this market. The Chinese export market trades particular specifications and now participants in this market will have the ability to manage their counterparty risk.
ASX Managing Director and Chief Executive Officer, Richard Humphry, said: "The launch of the wool futures contracts complements the grain futures contracts launched in May. The grain futures contracts, along with index and property futures contracts trading on ASX Futures Exchange 1 (ASXF), continue to go from strength to strength. The addition of wool futures is in line with our strategy of broadening our product range and offering innovative futures products."
Andrew Thomas, Managing Director, Michell Australia Pty. Ltd, the largest exporter and processor of Australian wool, said: "As Australia is the world's leading grower of premium wool, it is anticipated that this market will develop into the international pricing benchmark for wool, as other leading derivatives exchanges are for internationally priced commodities."
"China has grown to be the largest single destination for Australian wool in recent years and having futures contracts reflecting this market will give both parties greater price risk management. These deliverable contracts are a significant advancement in modern risk management for Australian wool producers and consumers who need protection from adverse price movements" said Steven Read, General Manager - Wool, Elders Australia Ltd. An integrated rural service provider, Elders are the largest grower brokers and own BWK Elders, the second largest wool processor in the world with operations in Australia, Turkey and Germany.
