MERINO wool 18.5 micron and finer continued to feel the brunt of the muted global discretionary spending at auctions across Australia this week.

The Australian Wool Exchange said the auction market closed lower this week, falling for the third successive series.

“After being forecast to be nearly 5000 bales higher, after 6.4 percent of the offering was withdrawn prior to sale, the final amount on offer was very similar to last week, with 44,437 bales available to the trade,” AWEX said.

The offering was 404 more bales than last week, and brokers passed in 7.8pc.

This week the sales in Sydney were held at the Sydney Royal Easter Show. It was the first time the auction has been held at the show since pre-COVID and provided an excellent opportunity to showcase Australian wool auctions to the lager community, AWEX said.

“The major downward impact on the market, was felt in the fine Merino fleece types.

“The individual Micron Price Guides (MPGs) for 18.5 micron and finer, fell by between 20 and 61 cents.”

AWEX said there was noticeable buyer interest in wool measuring 19.5-21 micron and the downward movement in the MPGs in this range less severe, with some small increases recorded.

The AWEX Eastern Market Indicator (EMI) dropped 10 cents for the series, closing at 1142 cents/kg clean.

“The EMI continues to track down for the calendar year,” AWEX said.

“The EMI opened 2024 at 1212 cents, losing 70 cents for the year, a fall of 5.8pc.

“The small reduction in the EMI highlights the stagnant nature of the market.”

AWEX said in the twenty-nine selling days of the year, the EMI has only had a double figure movement on four occasions. For the 2023/24 season, the EMI is trading higher.

“The EMI opened the season (July 2023) at 1126 cents.

“Since then, the EMI has risen by 16 cents, a modest 1.4pc increase,” AWEX said.

AWEX said the oddments continue to trend higher, in contrast to the rest of the market.

“Strong competition pushed prices higher, the three Merino carding indicators (MC) closed up by an average of over 6 cents.”

Higher price-point wools are paying the price – AWI

Australian Wool Innovation trade consultant Scott Carmody said mixed results were achieved depending on the market segment to wool type.

“Generally, it is the higher current price point wools that are being more affected.

“The lower priced wools in both the carding and crossbred wool descriptions sold quite well in comparison and managed to sell firm to seller’s favour,” he said.

“Price levels for the super fine Merino wools of 18.5 micron and finer continue to feel the brunt of the muted global discretionary spending.

“As such, our key European luxury apparel makers are extremely cautious and selective in the auction centres,” he said.

“That lack of usual strength has diluted competition across these finest of wools, which makes up around 34pc of the total Australian wool production.”

Mr Carmody said thankfully, a few of the larger vertical worsted mills and top makers operating in China have stepped into that space and are absorbing much of the better wools on offer.

“Going forward, if the Chinese get a taste for the better and finer quality wools, we could see some stiff competition return to this sector when Europe and indeed the global economy returns to normality,” he said.

“Merino wools in the 18.5 to 22 micron bracket fared significantly better than their finer counterparts.

“Price falls were minimal in this area.”

Mr Carmody said buying interest was mainly from China, but some smatterings of purchasing from Indian interest provided the counteraction necessary to basically hold the market at firm to buyers’ favour levels.

“The Australian dollar value against the US dollar and Chinese Yuan were insignificant this week in wool price determination.

“The slight increase in AUD value did not interfere with the current demand or buying room activity from directly represented buyers or indents,” Mr Carmody said.

“Amongst the buyers’ analysis for the week, evidence emerged of the Chinese top makers becoming more interested in the finer Merino wools as price gaps compress further.

“Two of the top three top makers’ representatives topped the Merino fleece buyers’ lists.”

There will be no wool sales next week due to the Easter recess. Next week the market heads into the annual Easter recess and sales resume in the week beginning Monday 8 April.

Sources – AWEX, AWI.