ONLINE wool sales stalled last week as prices dropped across Australia’s physical auctions.
AuctionsPlus technical operations officer Matt Cotton said volatility continues to be the norm for Australia’s wool auctions.
“The upward price movements of the previous week were short-lived, with last week’s auctions seeing prices drop across all types, especially for 19 micron wool.
“The Eastern Market Indicator finished the week at 1555c/kg clean, down 19 cents or 1.21 percent.
“In US$ terms, this equates to 1057c/kg.”
Brokers passed in 15.4pc of the 35,719-bale offering last week, indicating many growers are unwilling to accept the lower prices, Mr Cotton said.
“Perhaps they are expecting an increase in price in the mid-term future as supply continues to drop.”
He said the Australian wool forecasting report provided further evidence of an impending supply crunch.
“Shorn wool production for 2019/20 is 272mkg greasy, which is 9.2pc less than the previous year.
“Continued dry conditions, and higher adult slaughter rates will no doubt continue to hamper supply,” he said.
“In contrast to this somewhat negative sentiment, reports from the auctions indicate a more positive feeling.
“A mix of processors were competing throughout the auction, seeing value in the current price,” Mr Cotton said.
“This competition between buyers may help drive positive price movements in this week’s auctions; however, the offering is set to increase to 40,000 bales, which could keep prices flat.
“A price increase next week would make some of the online offering attractive for buyers.”
There are currently 11,794 bales on offer on AuctionsPlus, with 6551 bales selling since 1 July.