THE Australian wool market fell again in last week’s auctions, although there were positive signs late in the week.
The Australian Wool Exchange said sales opened in Melbourne only on Tuesday and the prices on offer for Merino fleece types were all below those achieved at the close of the previous auction series.
“By the close of the day, the Southern Micron Price Guides (MPGs) had dropped by between 1 and 45 cents,” AWEX said.
AWEX said it was a solid day for crossbred wools, with all MPGs recording increases, and minimal movements in the skirting and oddments resulted in the southern indicator losing 3 cents.
“With only Melbourne in operation, the AWEX Eastern Market Indicator (EMI) dropped by just 1 cent.”
All three centres were in operation on the second day.
“Sydney and Fremantle quickly came back to the levels that were set in Melbourne on the previous day, then there were generally further falls across all three regions.
“The regional MPG movements ranged between plus 8 and minus 37 cents,” AWEX said.
On the final day of the series, AWEX said Sydney and Fremantle were the only centres selling.
“The Merino fleece MPGs movements in Sydney ranged between plus 13 and minus 24 cents.
“In Fremantle (selling last), the MPGs were all positive (+5 to +23 cents), setting a good precedent for next week’s opening.”
AWEX said the EMI ended the week 9 cents lower, closing at 1135 cents a kilogram clean.
Due to a weakening Australian dollar (the AUD lost 0.82 cents compared to the US dollar since the close of Week 12) when viewed in USD terms the fall in the EMI was greater, the EMI lost 15 US cents, closing the series at 723 US cents.
Currency changes could not inject life into market – AWI
Australian Wool Innovation trade consultant Scott Carmody said the substantially weaker Australian dollar could not inject any life into the market.
“These movements and the weaker auction prices combined to see the general wool indicators up to nearly 2 pc lower by the close of selling in these currencies.
“What those changes in forex did do though was to prop up the market somewhat as buyers in both local and overseas markets assessed the new levels available,” he said.
Mr Carmody said the new season wools are generally showing a good improvement in quality above that of the past wet years.
“The most noticeable trait is the return to the traditional bright and white wools that the global industry values so highly.
“The drier conditions have also seen a rise in processing yields and a reduction in overall vegetable matter (vm) content,” he said.
“Length and strength tests are also slightly better than the last few seasons.
“Of some concern though is the rapidly deteriorating climactic conditions across many wool growing areas where rainfall is now required to ensure pasture through the hotter months.”
Mr Carmody said wool auction sale offerings are now trending more volume towards the superfine end ( under 18.6 micron) of the Merino sector.
“It has been somewhat interesting to see that many of the higher quality, best top making clips in that area are now being purchased by the Chinese manufacturers.
“The ultra-fine (finer than 16.5 micron) segment is attracting very strong interest from that nation, providing new outlets and competition to that wool production area.”
Mr Carmody said traders again topped Merino purchase lists, but Chinese top makers lifted their buying as prices reduced.
“The crossbred types though were dominated by two indent large orders from China which were largely responsible for the strength in competition and subsequent price gains.”
Next week’s selling changes again due to a Public Holiday (in Sydney), shifting selling to Wednesday and Thursday. 42,115 bales are currently expected to be offered nationally.
Click here to read the latest AWEX Micron Price Guides.
Sources – AWEX, AWI.