MORE wool growers held back lots as prices slumped on the back of an increased bale offering at auctions across Australia this week.

The Australian Wool Exchange said all market sectors recorded losses this week.

“Fremantle returned to the roster, pushing the national total up to 31,751 bales, this was 10,521 more than the previous week.”

Brokers passed in 15.3 percent of the bales offered, a lift of 6.7pc.

AWEX said the overall falls were driven by losses in the Merino fleece sector.

“On the first day, the Micron Price Guides (MPGs) for Merino fleece dropped by between 12 and 50 cents.

“Only the 19.5 and 20 micron MPGs in the North resisting the losses and were unchanged.”

On the second day, AWEX said the MPG movements for Merino fleece ranged between plus 15 and minus 33 cents.

“The benchmark Eastern Market Indicator (EMI) lost 28 cents for the series, closing at 1873 cents/kg clean.”

“After getting within 11 cents of the 2,000-cent barrier last month, the EMI has now dropped on 8 of the last 10 selling days, losing a total of 116 cents across this run.

“Understandably, the passed-in rate climbed this week as sellers were either unwilling or unprepared to accept the lower prices on offer, with 15.3pc of the offering failed to reach seller reserve.”

AWEX said the skirting market followed a similar path to the fleece.

“Good style, low vegetable matter skirtings (less than 3pc) attracted good competition and were less affected by the falling market, but still 20 to 30 cents easier.

“Lesser style, higher vegetable matter types were highly irregular,” AWEX said.

“After weeks of rises the crossbred sector recorded large losses in this series.

“In the south, the MPGs for 26 to 28 microns dropped by between 42 and 50 cents.”

AWEX said the oddment market also dropped, with general losses in the stains, crutchings and locks of between 10 and 30 cents reflected in the Merino Carding Indicators (MC) that fell by an average of 18 cents.

The market now heads into the three-week mid-year recess. Sales will resume in the week beginning Monday, 17 August.

Buyers cautious across the catalogue – AWI

Australian Wool Innovation said the larger catalogue placed greater pressure on the market and the lower clearance rate showed stronger seller resistance as prices weakened.

“Merino fleece recorded losses across the selling centres, with most indicators falling between 20 and 65 cents.

“The finer end was generally the most affected, although weakness extended through the medium micron categories as well,” AWI said.

“Crossbreds also came under renewed pressure, particularly in Melbourne, where the 26-28 micron indicators fell by more than 40 cents.

“Merino cardings were mixed by centre, but weaker overall, with declines in Melbourne and Fremantle outweighing a small gain in Sydney.”

AWI said while better style and lower VM lots continued to attract stronger competition, buyers were more cautious across the wider catalogue.

“Currency also contributed to the pressure on Australian dollar prices.

“With the Australian dollar strengthening toward US70 cents, the benefit to overseas buyers was reduced,” AWI said.

“This is reflected in the smaller fall in the EMI when measured in US dollars, indicating that part of the local decline came from exchange-rate movement rather than a matching fall in international price terms.

“The three-week break may now give the market time to reset, with both buyers and sellers able to reassess positions.”

AWI said the volume and quality of wool returning to market after the recess will be important in determining whether prices stabilise near current levels.

Sources – AWEX, AWI.