Australian wool prices dip as volumes increase and South Africa sells

Sheep Central, March 1, 2019

AUSTRALIAN wool prices fell this week as growers released more wool onto the auction market and sales resumed in South Africa after the recent Foot and Mouth Disease outbreak.

AWEX senior market analyst Lionel Plunkett said the Australian wool market recorded losses after rising for eight consecutive sales.

“When compared to the previous sale the AWEX Eastern Market Indicator closed 11 cents lower to 2016c/kg clean; the first week-on-week loss for the 2019 calendar year.

“The rally concluded last week at eight consecutive sales of increases, seven consecutive sales since the first sale of the year, the best start to a calendar year since 2006,” he said.

The EMI in US$ fell US10 cents to 1441c/kg clean as the A$-US$ exchange rate fell 0.13 cents to US 71.47 cents.

Growers respond to recent price increases

Mr Plunkett said last week’s price increases encouraged more sellers to the market, resulting in the national offering of 48,948 bales – 6919 more bales than last week – making this week the third largest sale of the season. Brokers passed in 8.4 percent of the offering.

“Despite the increased offering, the yearly national offering is still well down.

“There have been 173,927 less bales put through the auction system, compared to the same time last year, a reduction of 13.4 percent,” he said.

Mr Plunkett said with Melbourne only selling on the first auction day on Tuesday, the market quickly realised the losses that were experienced in Western region on the final selling day of the previous week.

“Prices generally fell by 25 to 35 cents.

“When sales resumed on the second day, it was Sydney’s turn to record these losses, generally 15 to 35 cents,” he said.

“Melbourne and Fremantle steadied; however, and both centres recorded modest increases for the day.

“In a contrast to the previous week, there were positive signs to finish the series, the three regional indicators all recorded increases on the final day.”

The western indicator recorded the largest increase for the week at 12 cents as Fremantle sold last.

“It is also worth noting that the Fremantle region recorded healthy increases, when compared to the previous week,” Mr Plunkett said.

Crossbred wools had mixed results, with the 28 and 30 micron wools dipping slightly below the records achieved last sale, while 26 and 32 micron lines managed 20 cent increases.

South Africa resumes wool sales

National Council of Wool Selling Brokers of Australia executive director Chris Wilcox said in his weekly newsletter that after postponing last week’s sale, the South African wool industry held an auction sale this week despite China’s continuing suspension of imports of raw wool from South Africa. Cape Wools SA reported that the finer end of the offering of 6278 bales sold well due to strong demand from Europe. However, the broader wools were under pressure due to the absence of China from the market. South Africa will next hold an auction on 6 March, Mr Wilcox said.

Next week the Australian bale offering reduces slightly, with currently 46,128 bales listed in Sydney, Melbourne and Fremantle.

Click here for the latest AWEX Micron Price Guides.

Sources: AWEX, NCWSBA.


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