MORE favourable exchange rates allowed local and China-based wool buyers to compete more strongly at auctions across Australia this week, according to Australian Wool Innovation.

AWI trade consultant Scott Carmody said favourable foreign exchange rate of mainly the AUD versus the USD and CNY (-1.25 percent and -1.52pc respectively) hav3e local and China based operators to compete more strongly.

In stronger demand scenarios, this should have led to greater gains on the local price returns to wool grower’s, particularly on the back of less than 30,000 Australian stored bales being up for sale this past week, he said.

The Australian Wool Exchange said the market recorded a small overall increase this week.

“The first day of selling buyer activity was subdued, with sale results mixed across microns and centres.

“The movements in the individual Micron Price Guides (MPGs) for merino fleece ranged between plus 15 and minus 19 cents, varied results in the other sectors resulted in the benchmark AWEX Eastern Market Indicator (EMI) falling by one cent for the day,” AWEX said.

“This was the fifth consecutive selling day where the EMI dropped.

“A weaker Australian dollar meant the fall was larger in USD terms and the EMI dropped by 7 US cents to 732 US cents,” AWEX said.

AWEX said the second day of selling was in complete contrast to the first.

“Buyer sentiment was buoyant, and bidding was noticeably stronger.

“By the end of the day the movements for the Merino fleece MPGs ranged between unchanged and plus 26 cents, only the 17.5-micron MPG in the north falling (by 10 cents),” AWEX said.

“The EMI ended its downward run, adding five cents for the day.

“This rise pushed the EMI into positive territory for the week and the EMI closed four cents higher at 1091 cents/kg clean.”

AWEX said this was just the second weekly rise in the EMI for the current season.

“With the finer microns recording larger falls than the medium to broad microns over the last few months, the differentials between microns has continually reduced.

“This is best displayed by comparing the 17- and 21-micron MPGs in the south.”

AWEX said the current difference in these MPGs is 368 cents.

“If we go back 12 months these MPGs were trading at 1767 cents and 1277 cents respectively, a difference of 490 cents.”

AWEX said wet weather continues to disrupt shearing in Western Australia, limiting quantity.

Many clips withdrawn from catalogue before auctions – AWI

Mr Carmody said most of the recorded gains were at the finer end of the Merino wool types.

“These advances were largely currency related improvements on top of a smattering of new business, as exporters again worked hard and priced keenly to convert some enquiry to export contracts.

Mr Carmody said the largest Chinese top maker remained the key buyer of Merino wool again this week by purchasing 20pc of the Merino fleece and 15pc of the skirtings.

“The local trading companies and indent operators supported without spooking the market, but still managed over 10pc of what was eventually offered after many clips were withdrawn from sale pre-auction.

Mr Carmody said this season will be remarkable for the Australian wool industry and the association with their export destination counterparts. · The forecast Australian production for 2024/25 is 285mkg greasy, while the Chinese import from Australia last season 2023/24 was 284.3mkg greasy — 86.4pc of total Australian production.

Fremantle will only require one-day of selling next week. Despite this, the national offering is expected to rise slightly. There are currently 33,830 bales rostered for sale.

Click here to see the latest AWEX Micron Price Guides.

Sources – AWEX, EMI.