News

Wool price benchmark at two year peak

Sheep Central, June 24, 2022

 

AUSTRALIA’S wool auction market continued to strengthen this week, reaching its highest point in more than two years after rising for the third consecutive series of weekly auctions.

The Australian Wool Exchange said strongest demand was for medium to broad Merino fleece types, and this was where the largest price increases were felt.

“The individual Micron Price Guides (MPGs) in Sydney and Melbourne for 19.5 to 22 micron increased by 10 to 63 cents for the series.

“Falls in some of the finer MPGs combined with minimal movements in the skirting, crossbred and oddment sectors resulted in a seven cent rise in the AWEX Eastern Market Indicator,” AWEX said.

“The EMI closed the week at 1474 cents/kg clean.

“The EMI has risen for the previous three weeks, adding a total of 60 cents over this period, a 4.2pc rise.”

EMI at highest point since March 2020

AWEX said the EMI is now at its highest point since March 2020 and the larger volumes and higher prices seen this year mean the total dollar amount of wool sold is also tracking well above the previous season.

“At the conclusion of this series the total dollar amount of wool sold for the season was $2,556.7 million, compared to $2,189.1 million for the same time last season, an increase of $377.6 million.”

AWEX said the national offering reduced by 5550 bales to 29,807 bales, due in part to no Fremantle sales.

“With only one sale remaining for the season, the total amount of wool offered this year is tracking well above the previous season.

Compared to the corresponding sale of the 2020/21 season there have been 109,889 more bales offered through the auction system, an increase of 6.4pc.

First-stage manufacturers outgunned by traders – AWI

Australian Wool Innovation trade consultant Scott Carmody said a much more sedate market atmosphere greeted participants at this week’s Australian wool auctions.

“It appeared though that the impetus of strengthening wool prices from the healthy prompt demand-driven scenario of the past few weeks has stalled for the time being.

“Foreign exchange rate movements for the week all went to the favour of local Australian dollar values and a small average wool price gain was subsequently managed,” he said.

“The usually positive price movements caused by lower than normal supply being available (WA did not sell this week) failed to materialize in general, but the Merino wool types broader than 19 micron did post robust gains of up to 40 cents/kg clean.

“This is the wool type area Western Australia contributes strongly to nationally by volume,” Mr Carmody said.

“Conversely, the finer than 19 micron Merino wools, most skirtings and crossbreds on offer showed losses in value of between 5 and 30 cents. Carding types were largely unchanged.”

Mr Carmody said when viewed in other currencies wool prices were all showing negative results. He said the EMI in US dollars fell US7 cents for the week to US1020c/kg clean.

“Given the low volumes and overall strong market, the clearance rate was underwhelming, with 89.1pc of all wool offered being sold.”

Mr Carmody said the first-stage manufacturers were outgunned by local and Chinese traders and also Chinese indent operators in auction purchasing.

“Australia’s largest and most influential trading house and one strong indent buying operation for Chinese delivery almost solely led the spot market price setting.

“In particular, strong interest for all types and descriptions as 19 to 22 micron dominated the price gains for the week,” he said.

“The quality of the offering is on the improve.

“Many of the districts that have been affected by prolonged wet weather and problematic feed conditions in paddocks appear to producing much better wool types and in more volume.”

Mr Carmody said vegetable matter content remains relatively higher in clips, but colour, strength and yields are good.

Next week is the final sale of the 2021/22 season. Fremantle returns to the selling roster, bolstering the national offering. Currently, there is expected to be 45,003 bales on offer with all three centres in operation.

Click here to see the latest AWEX Micron Price Guides.

Sources: AWEX, AWI.

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