BUYERS kept the Australian wool market relatively stable this week despite a larger offering, but growers reacted by passing in more wool as price levels were consolidated between centres.
Australian Wool Exchange senior market analyst Lionel Plunkett said the Australian wool market performed with mixed results across the three selling centres, but the total dollar amount of wool sold this week passed the one billion dollar mark for the season.
“Last season this feat was achieved in Week 24, and overall reduced prices meant that five extra sales were required for this milestone to be reached this season.”
Mr Plunkett said Melbourne sales this week recorded losses across all Merino Price Guides (MPGs) of between 3 and 24 cents, and Sydney posted movements in its MPGs of between -1 and +21 cents.
“The Fremantle region, which suffered significant losses, when selling last on the final day of the previous series (which Sydney and Melbourne did not) had solid increases in its MPGs of between 22 and 50 cents,” he said.
The national offering increased to 45,126 bales, 5285 bales more than the previous week. Growers passed in 9.3 percent of the offering, 3.5pc more than last week, as superfine prices were checked in Sydney and Melbourne, and this trend extended into the broader Merino MPGs in the south, equalising values with those achieved at the New South Wales selling centre.
Mr Plunkett said the larger offering helped to push this season’s offering above that from the corresponding sale of the previous season.
“There has been 4,717 more bales offered in the 2020/21 season than in 2019/20.
“After the EMI rose for the first three sales of this calendar year, increasing by 134 cents (the largest gain in nearly a decade) the EMI recorded a minimal loss this series,” he said.
“The EMI dropped 6 cents to close at 1285 cents, a fall of just 0.5pc.”
Mr Plunkett said due to a slight softening in the Australian dollar, the fall in US dollar terms was marginally higher, the EMI dropped US7 cents, a reduction of 0.7pc.
After being the strongest performing sector over the previous three weeks, the oddments were the only section of the market to record overall losses in all three centres, he said.
“This was reflected in the three Merino Carding (MC) indicators which dropped by an average of 17 cents. Next week’s national offering increases again, with Melbourne requiring three selling days to accommodate the extra quantity.
Price consolidation was the key – AWI
Australian Wool Innovation trade consultant Scott Carmody said the prices realized this week were largely around established levels and foreign exchange movements were minimal.
“Consolidation was the key with buyers showing willingness to accumulate inventory but not at the expense of pushing prices further,” he said.
“Despite the lowering levels, confidence and good volume orders were still very much apparent in the market.
“Business opportunities from mainly Chinese interests were renewed and strengthened last Friday and continued well into the early part of selling this week,” Mr Carmody said.
“As the week progressed price sensitivity appeared to have been reached for the time being as one by one buyers retreated to a safer trading environment once their immediate commitments had been satisfied.
“Traders led the buying lists once again, although good support from Chinese and European top makers was evident,” he said.
“Indent orders from China were strong on the fleece sector of both Merino and crossbred types whilst processors were dominant for cardings and oddments.”
Mr Carmody said 33,768 bales more have been sold to the trade this season compared to the same point of last year, up 4.5 percent.
“This is in complete juxtaposition to the fresh figures below demonstrating a lesser supply scenario, down 8pc.”
He said auction rostered volumes continue to rise and the offering next week is expected to reach around 53,000 bales.