EUROPEAN and Indian orders led the Merino wool buying in a flatter Australian wool auction market this week, although premiums of 240-300c/kg were paid for quality non-mulesed fleece lines.
The Australian Wool Exchange said after recording solid price increases last week, the market was been unable to continue to improve, recording an overall loss.
With 42,287 bales on offer, 868 bales more than last week, the AWEX Eastern Market Indicator finished four cents lower on 1144cents/kg clean.
“The overall fall was driven by losses in most Merino fleece types.
“The movements in the individual Micron Price Guides (MPGs) in Sydney and Melbourne ranged between +4 and -25 cents,” AWEX said.
“The western Merino fleece MPGs closed the week between 27 and 59 cents lower,” AWEX reported.
“As expected, the reduction in prices pushed the passed-in rate higher, as sellers became reluctant to accept the lower levels.
“The passed-in rate rose by 5 percent, with 10.1pc of the national offering failing to reach seller reserve.”
AWEX said when compared to the same time last year, the average passed-in rate is 4.8pc lower at 9.3pc (season to date).”
Due to a strengthening in the Australian dollar — the AUD gained 0.41 cents compared to the USD since the close of the previous series — when viewed in US dollar terms, the market recorded an overall positive movement, albeit a marginal one, AWEX said.
“The EMI gained US2 cents this series, closing the week at US738 cents.”
Non-mulesed wool premiums of 240-300c/kg – AWI
Australian Wool Innovation trade consultant Scott Carmody said the stronger Australian dollar (AUD) against all the major trading (+0.7 to +1.3pc) currencies accounted for all of the eastern losses in the local AUD prices, but the Western market ultimately fell to levels below that forex loss.
“This perhaps indicates some filling of the current orders and some easing of the pressure for prompt demand and shipment.
“Going with the trend of last week, the European and Indian orders were quite obvious in the auction rooms,” he said.
“Some new season specialty super fine wools were on offer and Italian buying saw much of that flow through to their dominant demands.
“Handy premiums of up 130/160 cents were available for those sale lots meeting the stringent tested and visual requirements,” Mr Carmody said.
“Those premiums were even higher (+240 to +300 cents) for those clips that were able to produce the highest quality wools under non-mulesed conditions.”
Mr Carmody said local trading exporters led the purchasing again this week.
“The large Chinese top makers lifted their buy in rates a little, but their activity in the auction rooms remain subdued.
“Selective buying to specific target price points appears to be their methods of operation at present,” he said.
“Chinese indent operators were similarly selective within the Merino sector, but strong purchasing across most of the crossbred wool types came from these buying orders.”
Mr Carmody said the trade gets together at the Nanjing Wool Market Conference this week, the first such event staged face to face since the outbreak of COVID-19.
Next week’s offering is slightly smaller and will be held in an unusual pattern to accommodate Public Holidays (Monday in Fremantle and Friday in Melbourne), Melbourne will sell Tuesday/Wednesday, while Sydney and Fremantle will offer Wednesday/Thursday. 40,389 bales are currently expected to be offered nationally, with Sydney holding a designated superfine sale.
Click here to see the latest AWEX Micron Price Guides.
Sources – AWEX, AWI.