GROWER reluctance to sell wool increased as prices dipped at Australian auctions this week, with all sectors of the market recording falls.

The Australian Wool Exchange said there was a total of 25,892 bales on offer nationally, 7373 bales fewer than last week, but weaker price trends led to a 13.6 percent passed-in rate, 4.2pc higher.

“On day one, with all three centres in operation, it was immediately apparent that price drops were the trend of the day,” AWEX said.

“Main buyer interest continued to focus on best/good style lots, and those with favourable additional measurement results, in particular those with low CVH (variation in Hauter length).

“These types attracted good competition and were least affected by the falling market.”

AWEX said lower style, higher vegetable matter content lots and lots possessing less favourable additional measurement results did not receive the same level of support and were the driving factor of the overall losses recorded.

“The Micron Price Guides (MPG) movements in Sydney and Melbourne ranged between plus 6 and minus 17 cents.

“As Fremantle did not suffer the falls on day two last week, here the losses were more significant; the MPGs lost between 11 and 61 cents, the western indicator dropped 32 cents.”

AWEX said the benchmark Eastern Market Indicator (EMI) lost 4 cents, closing the day at 1799 cents/kg clean.

“On day two, only Sydney and Melbourne were in operation and the market continued to fall.

“It was a similar pattern to the previous day, in that the before mentioned wool types all continued to sell well and were less affected by the poorer market conditions.”

AWEX said lesser style and spec wool was again the contributor to the overall losses recorded.

“The eastern markets MPGs ranged between unchanged and minus 23 cents.

“The EMI fell by 14 cents for the day, closing the day and the week at 1785 cents/kg.”

AWEX said as shearing levels increase across the country, next week’s offering is forecast to rise, despite the recent reductions. There is currently expected to be 31,458 bales on offer nationally.

Buyers pick and growers withdraw – AWI

Australian Wool Innovation said the market suggested global markets are still seeking a price level at which normal trade can resume.

“Buyer selectivity and increasing grower seller resistance were the key factors shaping the market.”

AWI said in Sydney, superfine and spinner-style Merino wool attracted strong competition, with selected lots trading as much as 200ac above the more average descriptions.

Fremantle recorded the largest decline, but this was due to prices adjusting to the eastern Week 16 close level, with Merino categories falling up to 60 cents.

AWI said spot pricing pressure increased on Wednesday, when the EMI lost a further 14 cents.

“There was considerable variation within the superfine offering.

“Premium European style and specification sale lots remained comparatively well supported, particularly certified clips, while non-Euro superfine types and standard top making wools bore the brunt of the depreciating levels.”

AWI said grower resistance became a more prominent feature as prices weakened. The national passed-in rate rose from 7.5pc on Tuesday to 19.2pc on Wednesday, while southern Merino fleece recorded a 26.5pc passed-in rate on the final day.

“Low inventories across the supply chain, constrained raw wool supply and wool’s compelling natural fibre story provide underlying support for the market.

“However, macroeconomic uncertainty and cost of living pressures continue to drive resistance to higher prices, while the potential for rising interest rates in key markets remains a concern,” AWI said.

AWI said the next round of auctions will be a test of whether current trading and processor demand can absorb a slightly higher supply without further downward price pressure.

Sources – AWI and AWEX.