ONLINE trading systems have been adopted and embraced by stakeholders in most major commodities across the world.
These are typically found to be more efficient for all parties, provide more control to users, increase market liquidity, provide agile and flexible order execution, offer transparency and entice more buyers.
In Australia's livestock sectors, there has been good industry use of online sheep and cattle trading.
But woolgrowers have been reluctant to adopt the main electronic selling systems available to them through AuctionsPlus and Australian Wool Innovation.
It is estimated less than 5 per cent of the total national annual woolclip that is offered for sale - at about 76,000 bales - is marketed online through these platforms.
In the three years after its launch in 2012, there were about 55,000 bales in total offered through AuctionsPlus. There were 11,116 bales traded in 2017-18.
This represents less than 1 per cent of the total wool sold in those periods.
Weekly AuctionsPlus online sales and a 24-hour offer board now attract steady volumes from regular sellers.
But online offerings are still low compared to amounts cleared through physical wool auctions.
All of Australia's major wool brokers and buyers operate on the AuctionsPlus system, and growers can access online feedback about their clip, latest market trends and historical benchmarking data from their broker or an industry body.
The company concedes there has not been the same "soaring adoption rate" by producers and agents for its wool platform that it has experienced for its online livestock systems - which had 2.9 million sheep and 375,000 cattle listed in 2017-18.
But it notes that the same woolgrowers selling their sheep electronically still use the physical auction market for their wool - and says there is potential to persuade them to switch systems in future.
"It is taking time to build producer and agency trust in electronic wool selling," an AuctionsPlus spokesman said.
Growers set a reserve price for their wool on the AuctionsPlus platform and this is protected through the process, which ensures they are selling at a level they have predetermined with less risk in a flat or falling market.
AuctionsPlus believes achieving the most out of successful online wool selling systems requires industry stakeholder collaboration and better promotion of key benefits to sellers and brokers.
It said potential benefits included lower transaction costs, increased liquidity, access to more buyers and faster execution of buying or selling orders.
"There is also greater control and better management of the buying process and decision-making," the company said.
There have been 17 electronic auctions held on WoolQ since its initial online sale in May 2020.
These included the first sale of a "package" of regionally-specific wool in June this year that comprised 690 bales from several South Australian growers.
AWI chief operations officer John Roberts said the SA-specific sale was highly successful.
He said 12 buyers had registered, which represented about 80 per cent of the buying fraternity, and 603 bales sold through the three participating brokers.
It was followed by a Western Australian-specific WoolQ sale of 800 bales, which was held on a week with no physical wool auction in Fremantle.
"WA growers were pleased to have the option of selling online through AWI's system during that week," Mr Roberts said.
"It was particularly benefi cial given there was an 80 cents a kilogram drop in market prices when physical wool auctions resumed the following week.
"They were able to avoid that discount."
Mr Roberts said there was strong potential for brokers to use WoolQ to assemble and market regional consignments of consistent lines - or wool that told a "story".
"WoolQ can help growers in a specific region develop closer supply chain alliances, offer similar types of fibre or feed wool more directly into brands that rely on robust product integrity and tracing systems," he said.
There are about 3500 registered users on the system, the majority of which are woolgrowers, according to Mr Roberts.
He said the overarching goal was to help wool producers and the industry stay relevant to buyers, processors and end-user customers.
"We want to offer the trade modern and alternative buying mechanisms that are transparent, trace the fi bre back to the farmgate and close loops in the supply chain," he said.
WoolQ, developed by AWI with grower levies at an estimated cost of more than $4 million, includes functions for online auction sales, 24 hour online offerboards and tenders.
It also has the potential to track data right through the supply chain for customer assurance, grower feedback and analysis and marketing opportunities.
"The concepts of provenance and traceability are no longer a nice thing to have," Mr Roberts said.
"These are a necessity of modern trade, and WoolQ provides a real opportunity for the wool industry in this space."
Woolgrowers who register on the WoolQ system set up a profile of their operation and can opt to electronically enter multiple wool specifi cations at shearing.
A ready reckoner can then provide an instant estimate of the likely return based on latest market prices.
Data is captured and made available for business planning, marketing decision-making and benchmarking across years.
Mr Roberts said at the other end of the supply chain, AWI was working on driving more buyer and brand owner traffic to WoolQ to view grower profiles, assess clips on offer and make purchases.
He said sales continued to be transacted through a broker, who would link the buyer to the exporter for transport.
"In theory, wool sold online using WoolQ could go from the farm to the broker's store to the exporter and then end-user - and all transactions and arrangements are tracked digitally," he said.
In its research into improving wool traceability systems, AWI is using WoolQ data in blockchain trials with several processors and brands in Europe and China.
When WoolQ was launched three years ago, it was estimated to provide a $38 million boost to the wool industry across the next 15 years - or about $2.53 million annually.
Around the same time, AuctionsPlus focused on boosting the uptake of its offer board and rolling-out regular online auctions.
WoolQ provided the industry's fi rst electronic specifi cations plus an online woolgrower directory in 2018.
There has been plenty of industry discussion about AWI's involvement in an area of - and potential duplication with - AuctionsPlus' plans.
AWI says choice is a good thing for the industry and the success of WoolQ will be underpinned by clear trading guidelines for how the wool is typed and valued, and how disputes will be resolved.
AWI and AuctionsPlus agree that online trading volumes for wool are unlikely to overtake the number of bales sold at physical auctions in the near-term.
But they have said these electronic platforms should be viewed by growers as a "complementary service" to help them manage risk and market volatility.
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