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Clean, good style Merino fleece lifts wool market

Sheep Central, May 6, 2022

STRONG demand for clean, good style Merino fleece has driven Australia’s wool auction market higher this week.

However, exporters said the market is still tracking US30-40c/kg below what it was before Easter, as a result of ongoing logistics and finance issues.

The Australian Wool Exchange said the market was driven by strong demand for good/best style, low vegetable matter (less than 1.5 percent vm) Merino fleece types.

There were 40,153 bales offered nationally, 8,599 fewer bales than last week, and brokers passed in 6pc.

“Auction numbers continue to climb well above the previous season.

“There have been 1,556,460 bales offered so far this year, 151,128 more than the 2020/21 season, an increase of 10.8pc,” AWEX said.

“Despite reporting ongoing concerns about shipment difficulties, buyer sentiment was very positive from the outset, continuing unabated until the final lot of the series.

“Across the country the merino fleece MPGs rose by between 7 and 57 cents,” AWEX said.

“These increases combined with rises in the skirting, crossbred and oddment sectors pushed the AWEX Eastern Market Indicator (EMI) up by 24 cents for the series, and the EMI closed the week at 1401 cents/kg clean.

“This 24-cent lift was the largest weekly rise in the EMI since the beginning of February, when the EMI gained 42 cents for the week,” AWEX said.

“The EMI is 82 cents higher than the same time last year, this represents an increase of 6.2pc over this period.”

AWEX said as the EMI has consistently tracked above the levels of last year, combined with the increased auction throughput, the total dollar amount sold at auction for this season is well above the corresponding sale of last year.

“Year to date there has been $2,1723.23 worth of wool sold at auction, compared to $1,765.9 million in the 2020/21 season, an increase of $406.33 million.”

Widespread demand lifts prices – AWI

Australian Wool Innovation trade consultant Scott Carmody said widespread interest from the trade from the outset of selling ensured dearer levels prevailed and the market was at the highest point at the conclusion of selling, which usually augurs well for the immediate term looking forward.

He said the Westeran Australian selling centre outperformed both the eastern centres to see the Western Market Indicator (WMI) close 43ac or 3pc higher at 1473c/kg by the close of selling.

“Due to the vastly reduced price in USD to buy wool due forex rates, most buyers were expecting a dearer market and this is exactly what resulted.

“All buying sectors were active, but it was the traders who led the charge on the first day and dominated all sectors,” Mr Carmody said.

“After a relatively quiet day, the top makers, manufacturers and indent operators lifted their purchasing intake on the final day to buy more lots but at higher prices and still under pressure to do so from the trader competition.

Prices were consistently rising throughout selling and concluded with Merino fleece and skirtings 30 to 50 cents dearer and all other types 5-10 cents dearer,” he said.

Next week the national offering increases, with 42,779 bales currently expected to be offered in Sydney, Melbourne and Fremantle.

Click here to see the latest AWEX Micron Price Guides.

Sources: AWEX, AWI.

 

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