Minimum Price Contract Text Box:

The minimum price contract protects against a fall in the wool

market price whilst allowing the benefits of any increase in price.

It provides low cost disaster insurance with an upside.

In collaboration with your broker you decide on.

 

The Contract

· Maturity date (when wool is to be sold).

· Quantity of wool to be minimum priced (in kilograms clean).

· The anticipated quality (Micron category).

· The Minimum price (X) provided by your broker.

· The contract charge (Z), deducted at Finalisation.

Your Indicator price (B) will be above or equal to (X) at finalisation.

 

Spot wool sale (auction).

Your wool is sold in the usual way at auction on the date specified.

· The actual quantity is determined.

· The average price for the wool is determined (D).

· The Micron Price Guide (MPG) is determined by AWEX (E).   

 

Finalisation

· The Indicator Price (B) equals the greater of either the quoted minimum price or the AWEX MPG (E).

· The Quality Adjustment (C) equals your Average Wool Price (D) minus the AWEX MPG (E).

Your contract price is easy: the Indicator price (B) plus the

Quality Adjustment (C), less the Contract Charge (Z).

 

Wool delivered above the contract quantity is payed out at the Average Wool Price (D).

Text Box: Home## Text Box: Wool Indicator Contract Text Box: Wool Collar Contract Text Box: Interactive Examples Text Box: Target Price Watchdog Text Box: Home Line Callout 4: The minimum level your indicator price can fall to. Line Callout 3: This charge relates to the time and risk in providing the contract. Line Callout 3: Your Wool compared to the AWEX MPG Line Callout 3: As the MPG is higher than your Min price. The MPG is used. Text Box: Back