China, Italy and India send Australian wool market up

Sheep Central October 21, 2022

THE Australian wool market recorded a second successive week of strong gains this week, driven by stronger demand from China, Europe and India.

The Australian Wool Exchange said on the first day of selling, from the opening lot in the eastern auction centres all the way to the closing lot in the west, buyer sentiment was extremely high.

The strong widespread competition helped to push prices higher, AWEX said.

“Main buyer interest continued on the better style and spec fleece lots; however, all Merino fleece types and descriptions posted gains in the rapidly rising market.

“The individual Micron Price Guides (MPGs) across the country added between 18 and 75 cents for the day,” AWEX said.

“These rises combined with gains in all other sectors pushed the AWEX Eastern Market Indicator (EMI) up by 31 cents for day.

“Interestingly, this was the largest daily rise in the EMI since the same time last year, when the EMI added 50 cents for the day on the 19th of October 2021, re-enforcing the view of many in the industry that the market rises at this time of year,” AWEX said.

“In fact, if we go back a further season the EMI rose by 123 cents on the 20th of October 2020.”

AWEX said buyer activity on the second selling day was as buoyant as on the first, with further strong rises.

“The Merino fleece MPGs added another 4 and 83 cents.

“The EMI rose another 21 cents for the day, adding a total of 52 cents for the week,” AWEX said.

“This was the largest weekly rise in the EMI since the 17th of June 2021.

“The EMI closed the week at 1323 cents/kg clean.”

AWEX said in the last two weeks the market has recovered the losses of the previous six weeks and the EMI is now back above where it finished at the end of Week 10, when it closed at 1319c/kg clean.

China buyers follow Europe and India at top end – AWI

Australian Wool Innovation trade consultant Scott Carmody said buying was keenest from the global trading export companies this week, with Indian and European interest setting the market pace at the top end. This resulted in China orders having to follow to get the final batch specifications correct, he said.

“This was evidenced in the large price premiums paid between the lower and higher Cvh (co-efficient of variation hauteur-top length).

“In many micron groups, the differentials extended way past the 100ac mark for the lower calculated cvh sale lots” he said.

“The largest China top maker was again the most visible Chinese destined orders at auction.”

Mr Carmody said pleasingly the crossbred part of the trade also lifted, with the 28 micron indicator gaining 25 cents in both selling centres, although still a long way south from its five-year average. It is around half the price it was this time two years ago, he said.

Mr Carmody said as opposed to last week, the EMI when expressed in US dollar terms, also lifted, by US42 cents to US836c/kg and this demonstrated the real driver of rising wool prices for this week was demand.

Merino fleece lines typically lifted 30 to 90 cents with better styled and better testing wools lifting by well over 100 cents per kilogram for the week and cardings rising by up to 40 cents also.

“Buying activity was very positive from the outset and remained strong throughout the two day selling week and when bidding stopped in the west.

“The Western Market Indicator had risen to 1469c/kg, up 62 cents for the week,” he said.

Mr Carmody said next week will be a bigger test for the market, with 42,433 bales expected to be on offer nationally.

Click here to see the latest AWEX Micron Price Guides.

Sources – AWEX and AWI.


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