SIGNIFICANT price drops for all Merino categories led to another overall fall in the Australian wool auction market last week.

The Australian Wool Exchange said the national bale offering was relatively small at 31,062 bales, but the Merino fleece price reductions in individual Micron Price Guides ranged between 4 and 40 cents.

The benchmark AWEX Eastern Market Indicator dropped by just two cents on the first selling day and then 9 cents on the second, closing the week 11 cents lower at 1087 cents/kg clean.

“The EMI now sits just one cent above the season low.

“In an all too familiar pattern, again due to currency fluctuations, when viewed in US dollar terms the market rose,” AWEX said.

“The EMI added US6 cents for the series, closing at US749 cents.”

AWEX said the stagnant nature of the market can best be shown by looking at the movements in the EMI since the beginning of the calendar year.

“The EMI started 2024 at 1212 cents, 125 cents lower than its current level, a drop of 10.3 percent.

“Calendar year to date there have been 74 selling days, across these sales the EMI has posted 59 single digit movements (plus or minus 9 cents or less) and of these 59 days, 48 times the movement in the EMI has been 5 cents or less,” AWEX said.

“The average daily movement of the EMI (both positive and negative results) for the calendar year is just 5.9 cents.”

AWEX said despite the flat market, clearance rates have continued to be relatively high.

“This series the passed-in rate was 8.9pc.

“The season to date passed in rate is currently 8.8pc.”

Chines top makers leader volume buying – AWI

Australian Wool Innovation trade consultant Scott Carmody said the market results might have been far worse given the AUD strengthened by 1.8pc against the US dollar from week to week.

“Helping out also has been the well managed lower supply hitting the auction sale catalogues by brokers, keen to play their part in these unknown and softer demand conditions,” he said.

Mr Carmody said the price retractions were felt hardest within the Merino fleece sector with all micron segments stepping down by 15-30c/clean kg for the week.

“By selling all of the offering on one day, the Western Australian prices of Merino fleece had more minimal falls to the order of 10-15c/clean kg by the close of their selling.

“The carding types told a different story.

“This sector has somewhat struggled the most the past few months, with interest for new business hard to come by,” he said.

“The carbonizing sector has been particularly quiet.

“This seemed to change this week, with many exporters able to write some handy new contracts for the shorter wools,” Mr Carmody said.

“This may help dispose of some of expensive stocks on hand and lessen the potential losses there.”

Mr Carmody said the finer crossbred wool types were a general 15c/kg clean lower, but the minimal volume on offer of broader than 30 micron wools met better competition and managed to place 5 to 10c/kg clean value to the growers’ returns.

“The markets largely matched the reported sentiment emanating out of Puyuan, Zhejiang China where the 35th edition of the annual Nanjing Wool market conference was held.

“The general reports had room 1 types (Merino fleece) tough to sell anywhere near the correct price, whilst all other wools (Room2 types) were easily disposed of if the stocks held matched the types being wanted,” he said.

“As is often the case, the type descriptions were all very similar in the length, colour and micron ranges required.”

Mr Carmody said the top two Chinese top makers dominated volume buying last week, but were strongly competed against by the top two locally based trading exporters.

There are currently 33,949 bales on offer in Sydney, Melbourne and Fremantle.

Sources – AWEX, AWI.