AUSTRALIAN wool growers sold readily at improved prices as improved competition lifted values at a daily rate not seen since February last year.

The Australian Wool Exchange said the market has recorded a strong overall upward movement in auctions this week, with currency fluctuations only playing a partial role in the rises.

Brokers offered 31,951 bales, 711 more bales than last week, and the passed-in rate fell 2.9 percent to 1.8pc.

With auctions only in Melbourne and Fremantle on Tuesday, the first selling day, the individual Micron Price Guides for Merino fleece rose between 11 and 57 cents.

Fremantle recorded the largest increases, as the west did not enjoy the gains on offer on the final day of the last auction series, AWEX said.

“The AWEX Eastern Market Indicator rose by 8 cents, but due to a sharp fall in the AUD, in USD terms it dropped by US15 cents.

“This 23-cent difference between the two was the largest difference between the two EMIs since March 2023, where the difference was 24 cents,” AWEX said.

On the second day of selling on Wednesday all three centres were in operation and the market continued to rise unabated.

“By the end of the day, the Merino fleece MPGs had risen by between 10 and 88 cents, with this time Sydney playing catch up and posting the largest gains.

“The EMI rose by 23 cents, this was the largest of the current season and the largest daily increase in the EMI since February 2023,” AWEX said.

“The EMI also rose in USD terms, gaining the 15 cents it lost on the first day.

“On the final day, only Sydney was in operation, due to a Monday Public Holiday in NSW, and the 4752 bales on offer was the smallest national daily offering of Australian wool since 2013,” AWEX said.

“The market rose again, with the EMI adding a further 4 cents.

“The EMI closed the week at 1,139 cents, the 35-cent weekly rise was the largest since July 2023.”

“The 96-cent weekly rise in the 18 micron MPG in the west was the largest individual MPG increase since the final sale of the 2023 calendar year (14th of December), where three figure rises were recorded.

“The large rises have encouraged sellers to the market, pushing next week’s national offering up to 42,005 bales.”

Bids came thick and fast – AWI

Australian Wool Innovation trade consultant Scott Carmody said the sale room bids came thick and fast from the outset of selling and were progressively stronger.

“At times the bidding became somewhat aggressive,” he said.

“Improved current demand, a few “new” players represented in the indent buying sector and a vastly better Australian dollar exchange rate against the US dollar all contributed to set the market on the upward trajectory for the sale series, alongside the low volumes available.

“This better competition originated out of a more confident Chinese manufacturing sector, but their ensuing market actions flowed through to all other wool destinations,” he said.

“Enquiry, contracts and auction purchases resulted from European and Indian buyers, looking to get set for some supply at somewhere near the ruling price levels.

“As has been the case for a few seasons now, the Chinese orders often lifted price levels instantaneously to outbid those other importing nations,” Mr Carmody said.

“This current shift in sentiment though appears to have had its genesis from improved stocks, shares, equities and property values, which lifted confidence for both the textile manufacturers purchasing managers with an eye to the future selling opportunities and local operators reacting to that new trend.

“Of course, these are strong indicators of a strengthening macro economy which should see discretionary spending return to retail,” he said.

“Lowering supply and having a large number of US dollar using indents and direct buying operators in our sale rooms have certainly aided in prices recovering somewhat this week.

“The forex rates play that integral role in price conversion to auction levels and bids on a daily, if not, intra daily basis,” Mr Carmody said.

“The 2 percent advantage of the lower AUD this week was fully utilised, and then some.”

Mr Carmody said the limited supply saw some individual lots being purchased at an “at best” scenario, causing price gains of well over 100 cents clean.

“Merino prices all appreciated by 50-90 cents/kg clean, with the long suffering superfine descriptions the beneficiary of the largest gains.

“All other sectors gained 5 to 20 cents.”

Mr Carmody said local exporters and the Chinese indent operators dominated purchasing with the top makers relegated down the lists for the time being.

“Indents certainly forced the gains into the market and traders reacted and followed.”

Next week sees 39,600 Australian stored bales rostered on Tues/Wed.

Sources – AWEX, AWI.