AUSTRALIAN wool growers have responded quickly to the fall in Merino fleece prices on the auction market this week, more than quadrupling the passed-in rate of bales to 8.3 percent.

The Australian Wool Exchange said the market generally recorded modest falls this week and was best described as subdued after the sharp rises recorded during the previous selling series.

“Last week’s price increases encouraged more sellers to the market, pushing the national offering up to 41,065 bales.

“This was the largest sale since Week 8, which was after the annual three-week mid-year recess,” AWEX said.

“Although this sale was relatively large, the season to date offering continues to trend lower.

“So far this year there has been 432,254 bales put through the auction system — 109,999 fewer bales than the previous season, a drop of 20.3pc,” AWEX said.

“High yielding — higher than 66pc dry in particular — Merino fleece lots containing favourable additional measurement results (AM), continued to attract strong buyer interest and the prices on offer for these types were at very similar levels to those of the previous week.

“Lower yielding wool and wool with less favourable AM results did not receive the same level of support, as buyers became more selective with their purchases,” AWEX said.

“These low-yielding types were the driving factor in the overall downward trend in the Merino fleece Micron Price Guides (MPGs).

“Across the country the Merino fleece MPG movements ranged between plus 11 and minus 30 cents.”

AWEX said the softer market pushed the passed-in rate up to 8.3pc, 6.5pc higher than the previous series.

“The 1.8pc passed-in rate last week was the lowest passed in figure since August 2018.”

The AWEX Eastern Market Indicator (EMI) added 1 cent on the first selling day, pushing the run of positive daily EMI movements to six.

“On the second day the EMI dropped by 2 cents, meaning the EMI fell by the barest of margins, closing the week 1 cent lower at 1138 cents/kg clean,” AWEX said.

AWI

Australian Wool Innovation trade consultant Scott Carmody said the results on most types offered this week were largely unchanged to buyers’ favour.

“Competition remained strong, but most operators were wanting to see further demand signals before committing to full support at the higher Australian dollar local levels, hence the  stagnation of prices this week,” he said.

“The price delivered basis to mainly China in US dollars remains a general US15/20 higher since the rise last fortnight.”

He said trading exporters were the dominant buyers once again, but as their buying backed off on the final day, prices dipped slightly which saw the largest Chinese top makers step in and support the market from that point on.

“Some higher volumes were available and this helped disseminate good weights amongst the trade of most sectors.

“In a designated superfine sale week, the good offering of ultrafine sub-15micron lots sold exceptionally well under intense competition,” Mr Carmody said.

“A high price of 12,700c/kg greasy for a line of 13.2 micron fleece stood out.”

Next week’s offering is expected to fall. There are currently 36,553 bales rostered for sale in Sydney, Melbourne and Fremantle.

Sources – AWEX, AWI.