AUSTRALIA’S wool price benchmark this week made its largest weekly increase since October last year.
The Australian Wool Exchange said every sector of the market made solid gains, with the 40,491 bale offering receiving excellent support from a large cross section of exporters, resulting in spirited bidding from the opening lot.
“This strong buyer sentiment helped to push prices continually higher as the series progressed,” AWEX said.
“The Merino fleece types again led the way with strong rises across the entire micron spectrum.
“These gains were reflected in the Micron Price Guides (MPGs) across the country which rose between 15 and 98 cents, with the finer microns recording the largest increases.”
AWEX said the rises felt in the MPGs, combined with all other sectors of the market recording healthy gains, helped to push the AWEX Eastern Market Indicator (EMI) up by 42 cents for the series to close at 1449c/kg clean.
“This was the largest weekly increase in the EMI since October last year, where the EMI added 46 cents.
“The market has recorded overall positive movement for every sale of this calendar year,” AWEX said.
“The EMI has risen for five consecutive weeks, adding a total of 91 cents over this period.
“When compared to same time last year, the EMI continues to track higher, the EMI is currently 164 cents higher than the corresponding sale of the 2020/21 season, an increase of 12.8 percent.”
AWEX said general rises in oddment types of between 25 and 40 cents combined to push the three Merino Carding Indicators (MC) up by an average of 34 cents.
“After two weeks of unusual sale days, next week’s roster returns to the normal Tuesday/Wednesday selling.
“The national offering increases considerably, due in part to the higher prices achieved in this series and the ability of Melbourne to conduct a three-day sale.”
A highly competitive market ensued – AWI
Australian Wool Innovation trade consultant Scott Carmody said selling over a Wednesday/Thursday rotation to accommodate the Chinese New Year on Tuesday, the market pushed upward from the outset following on from strong trader reports of escalating interest and price levels emanating from China.
“Some commentary pointed to traders being unable to commit to all of the new business available, so indents were expected to be an additional positive influence on price outcomes.
“Indian and European contracts remained outstanding and additional business also became available from those areas,” he said.
“First stage processors were interested on all types and as such, a highly competitive market ensued.
All buying sectors from all global destinations were active and the resultant market was one of the keenest and hard-fought weekly auction series seen for some time.”
Mr Carmody said the EMI in Australian dollars finally pushed above the market basis of March 2020, which was the start of the negative COVID impact upon wool markets.
“In US$ terms the the EMI went 0.5 of a percent higher, as the A$ forex rate recovered against the US$.
“The US$ EMI finished at US1032c/kg clean, a 3.5pc gain.”
Mr Carmody said the Western Market Indicator (WMI) gained 37 cents for the week and closed at 1492c/kg clean, but interestingly the last day a pullback of 10 to 20 cents on most of the Merino fleece offering was in stark contrast to the rises in the east posted earlier that day.
There are currently 48,274 bales listed to be offered in Melbourne, Fremantle and Sydney next week.
Click here to see the latest AWEX Micron Price Guides.
Sources: AWEX, AWI.