Broker admits wool returns oversold

Elders Primary Wool has conceded it oversold the returns expected from its supply contract with United States carpet retailer CCA Global Partners, announced in February. Some farmers say they were promised up to $5 a kg for their wool only to find six months later it has not been sold, meaning it has had to be sold at auction either by Elders or a competing broker. Elders National Export manager Craig Wilson said the company had been overoptimistic with what it could achieve given a decline of up to 40% in carpet sales in the past year. Declining sales also led to delays in promoting its Just Shorn brand, which was launched in June. That brand was linked to relationship branding and promotion with CCA Global Partners, and would now happen early next year at CCA's annual retail convention on February 1-2 reports The ODT. "When we do come out with a contract, at that stage we will be able to give a sense of the order of magnitude of premium and timing around the delivery of that premium." Mr Wilson said when announcing the deal and the Just Shorn brand, EPW had confidence it would result in an increase in retail carpet prices. However, some EPW staff suggested the deal would see farmers receive $5 a kg for their wool, the result, according to Mr Wilson, of confusion. He was reluctant to say what premiums could be achieved, but believed EPW's marketing strategy of promoting the Just Shorn brand to retailers was correct, as opposed to that of Wool Partners International, which he said was targeting carpet manufacturers with its Laneve brand.