ABSTRACT
Australia is the world’s leading producer and exporter of fine wool, and typically more than 70 per cent is exported as greasy wool, especially to Japan, the USSR and the European Community. Most of this wool is sold in competitive auction markets in Australia, and since May 1960 agents have been able to use the merino wool contract on the Sydney Futures Exchange (SFE) to improve management of their wool market risks and/or support their expectations of wool prices. Turnover of the wool futures contract peaked at an average of 15,500 lots per month in 1973, although since 1981 interest in this contract has waned with the growth of trading in financial futures on the SFE. The merino wool contract on the SFE provides for delivery of greasy wool 22 micron type 78 (64 type 78 prior to 1976), equivalent to 1,500 kilograms clean weight, in the months of March, May, July, October and December at specified delivery points in Australia.
