Wool Market Reports

Merino fleece prices lead wool market slide

Sheep Central, March 22, 2024

THE Australian wool market fell further at auction this week, driven by driven by losses in the Merino fleece sector.

The Australian Wool Exchange said the national offering rose by 3978 bales to 44,033 bales, and brokers passed in 8.7 percent.

AWEX said most of the price losses were recorded on the opening day of selling.

“By the close of the day, in the Merino fleece, the individual Micron Price Guides had fallen by between 9 and 43 cents.

“The largest falls were in Sydney and Fremantle, as these centres were yet to realise the losses in the market recorded in the standalone Melbourne sale of Thursday last week.”

The AWEX Eastern Market Indicator closed the day 16 cents lower.

“This was the equal largest daily fall in the EMI this calendar year, and the largest fall since August last year, when the EMI fell by 24 cents,” AWEX said.

“The market settled on the second selling day, with a positive finish in the West where all MPGs posted rises.

“Varied movements in the Eastern centres ended with a one-cent daily rise in the EMI.”

AWEX said the EMI closed the auction series 15 cents clean lower at 1152c/kg, a 1.3pc drop.

“In contrast to the previous series, due to a strengthening Australian dollar, in USD terms the overall fall was larger.

“The EMI lost US19 cents for the series, closing at 753 cents, a 2.5pc fall.”

AWEX said the oddments again defied the trend of the other sectors.

“Strong interest, particularly in locks, helping to push the market higher.

“Since the start of the calendar year, the three Merino Carding Indicators (MC) have recorded an average positive movement for nine out of eleven selling series,” AWEX said.

The three regional MC opened the year at an average of 700 cents. These indicators now average 741 cents, an increase of 5.9pc.

More wool going to China – AWI

Australian Wool Innovation trade consultant Scott Carmody said there were price falls across the board even with the sharply lower Australian dollar value against the US dollar and Chinese Yuan.

“This forex change theoretically halved the potential percentage falls that could have effected local returns to grower sellers.

“Crossbred and Merino fleece and skirtings from both those sectors were all affected, but cardings were resilient and managed to gain a few cents,” he said.

“The USD EMI represented the sharply tougher trading conditions at the start of the week by immediately falling 2.6pc whilst the AUD EMI reduced by 1.3pc.

“The closing day of selling though was far more positive and saw both indicators stable to slightly higher as the market rebounded slightly,” Mr Carmody said.

“This was borne out by the strongest prices of the day being achieved at the last to finish selling centre in Fremantle, Western Australia.”

Mr Carmody said auction room buying this week included some very specific buying strategies.

“Price levels appeared to still be very much in control despite the downturn.

“Operations – initially and mainly by the largest traders – pointed to the market being staged down to where sales could become available,” he said.

“There were no indications of a destabilised market where free-falling prices would come into play. “The reversal on the second day of auctions were largely due to strong buying orders from a single Chinese indent back into the market,” Mr Carmody said.

“Not unsurprising but still notable, at the completion of the first half of the 2023/24 season, Chinese import of Australian wool by percentage of volume has grown even further.

“By the end of the Australian Bureau of Statistics (ABS) reporting period in December 2023, export data showed that 85.5pc of all Australian wool flowed through to offload in China,” he said.

“Last year’s completed season 2022/23, China’s import was 82.6pc by volume.”

“At the halfway point of the 2023/24 season, 96.7pc of all wool export by weight has been in the raw greasy wool state.”

A further 2.2pc was exported as carbonized wool and 1.1% was in the scoured wool form, Mr Carmody said.

Next week’ national offering is forecast to rise to 49,814 bales over Tuesday and Wednesday prior to the one-week recess in sales for the Easter break.

Click here to see the latest AWEX Micron Price Guides.

Source – AWEX, AWI.


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