Russia To Add Wool As A Stock Exchange Traded Commodity

Russia intends to introduce wool auctions and include wool among exchange-traded commodities to regulate and structure this market segment, according to Kseniya Bobyleva, deputy director of the Department of Light Industry and the Timber Complex at the Russian Ministry of Trade and Industry. She was speaking at the 25th Russian Exhibition of Pedigree Sheep and Goats which has been taking place in Dagestan.

Bobyleva said that comprehensive adjustments are currently being made to state approaches for regulating the wool market to eliminate excessive intermediaries and ensure trade transparency. She stated that “To address this situation, we plan to implement wool auctions and subsequently include wool among exchange-traded commodities, primarily for external markets, to make this trade transparent and understandable for all participants. This approach may not appeal to everyone, but as we see it, such cooperation cannot be established otherwise.”

A register of light industry enterprises engaged in wool processing has been compiled to connect consumers with producers, she said. A similar register of wool producers is expected to help processors identify sources for this valuable commodity.

Last year, a new roadmap for developing advanced wool processing was approved, she said. One long-term objective of the program is increasing domestic wool processing volumes from the current 13,000 tonnes to 20,000 tonnes by 2027.

Animal husbandry requires attention and some stabilisation mechanisms due to the impact of global warming and the potential for increasingly erratic weather conditions. Adding mechanisms such as futures contracts, which protect producers by guaranteeing certain price levels related to market demand can assist in catering for these variables. Stability is important as a way of protecting an agricultural mainstay employing millions of workers in different disciplines, from shepherds to designers.

China is the world’s largest wool producer, followed by Australia and New Zealand. Russia is currently the world’s ninth largest, but has eyes on breaking into the top five. The world’s top ten wool-producing countries accounted for 69.6 % of all global wool supplies in 2022.