AUSTRALIA’S wool auction market was slightly dearer this week and the gross value of clips sold this season passed the billion dollar mark to $1,021.81bn, 10 weeks earlier than last year.

“In the 2020/21 season the billion-dollar mark was not reached until Week 32 (February), the Australian Wool Exchange said.

The market this week was boosted by strong Chinese processor demand, although still constrained by ongoing shipping and logistical issues.

The Australian Wool Exchange said the market recorded another small overall increase in the benchmark Eastern Market Indicator, pushed mainly by increases in selected Merino fleece wool types.

The national offering rose by 1852 bales to 39,577 bales and brokers passed in 10 percent.

“Good style wools 17.5 micron and finer recorded solid increases, and the individual Micron Price Guides (MPGs) in Sydney and Melbourne added between 5 and 35 cents for the series.

“Wools 20 micron and broader also attracted strong buyer demand, pushing prices higher as a result,” AWEX said.

“Across the country the MPGs for 20 to 22 micron rose between 6 and 20 cents.

“These rises, combined with minimal movements in the other sectors, helped to push the AWEX Eastern Market Indicator (EMI) up by 5 cents for the series, closing at 1346 cents/kg clean.”

AWEX said the EMI has now risen for three consecutive selling series; this is the first time this has occurred in the 2021/22 selling season.

“The last time the EMI recorded a larger upward run was at the end of the previous season, when the EMI rose for six consecutive weeks (Weeks 47-52).”

Due to currency movements — the A$ dropped US0.46 cents compared to the US$ from last week — when viewed in US$ terms the EMI recorded a small 3-cent loss, AWEX said.

The carding market also had a very steady series, with minimal price movements in locks, stains and crutchings that brought about an average rise in the three Merino Carding indicators (MC) of 1 cent.

Prospects into the New Year will depend…

Elders state wool manager for Victoria, Tasmania and the Riverina, Lachie Brown, said the market is positive as the annual three-week Christmas recess nears, with a reasonable amount of wool being offered.

“The market’s holding firm enough, although the feedback we’ve had from buyers around shipping delays and potential finance complications coming up to Christmas are a concern.

“But we are looking at some good solid gains on medium and fine Merino wools this week, so it’s holding relatively well,” he said.

“The prospects are if we don’t get too big offerings in the next couple of weeks leading up to Christmas it should maintain into the recess.”

Auctions go into Christmas recess for three weeks from the week starting on 20 December and including start in the New Year in the week starting on 10 January 2022.

Mr Brown said the market demand augurs well for the New Year, depending on the background variables of the new COVID-19 variant, shipping delays and logistical issues.

“Outside of that, if the market is solid into the recess, it should be reasonably positive in the New Year as well.”

Strong and widespread bidding atmosphere – AWI

Australian Wool Innovation trade consultant Scott Carmody said a very strong and widespread bidding atmosphere was present in the market this week.

“This helped consolidate the gains of the past few weeks.

“Overall, it was a very solid market and all reports were stating firm unchanged to sellers’ favour throughout the week’s selling activity,” he said.

Mr Carmody said China’s first stage manufacturers kept their recent buying pressure on and strongly influenced the auction competition.

“This forced traders and indent buyers to up their ante as far as quantity obtained.

“New business opportunities to exporters were available, but were described as being very sporadic and limited in volume – mostly a negotiation from what both the overseas buyer wants and what the seller is prepared to commit to – and very price sensitive.”

Mr Carmody said the ongoing issues with international logistics are a large contributor to market outcomes at present.

“The shipping situation is unpredictable at best.

“Vessels booked may arrive and sail or be delayed or not arrive at all,” he said.

“Container access and port delays are also playing a negative role.

“Combine those issues with the upcoming three week recess for Christmas and commercial decisions for local auction buyers become increasingly difficult and greater risk.”

Next week’s offering remains similar, with 41,362 bales currently expected to be offered.

Sources: AWEX, AWI, Elders.