Merino wool prices slumped this week after lifting last week due to a shipping squeeze. Image – AWEX.

AUSTRALIA’S wool prices returned to levels matching current demand at auctions this week, losing last week’s gains due mainly to a May shipping squeeze.

AWEX senior market analyst Lionel Plunkett said after showing small signs of recovery at the previous week’s auctions, the Australian wool market has suffered further losses this week.

Merino wool prices generally fell 18-60 cents despite the national offering falling by 2270 bales to 21,101 bales, with brokers passing in 12.5pc. Exporters reported that demand was restricted to China, with only small amounts of enquiry from Europe and India due to COVID-19 pandemic disruptions and depressed global retail demand.

Mr Plunkett said due to the small number of bales on offer, Sydney and Fremantle again only required one-day sales, with Fremantle selling on Tuesday and Sydney selling on Wednesday.

“Melbourne opened proceedings on the first day and in early trade showed signs of further improvement.

“The price rises could not be maintained in all microns, with only the individual Micron Price Guides (MPGs) of 17 and 19.5 to 21 micron posting increases for the day,” he said.

“The rises in these MPGs was enough to push the AWEX Eastern Market Indicator (EMI) marginally higher, which gained 1 cent.

“Fremantle selling later in the day did not enjoy the same increases,” he said.

“The Fremantle MPGs fell across the board, with losses of 18 to 44 cents recorded.

“The softer tone evident in Fremantle toward the end of the first day, was realised in the eastern centres when sales resumed on day two,” Mr Plunkett said.

“The falls in the MPGs were between 8 and 64 cents, the losses in Sydney the most substantial of between 44 and 64 cents.

“On the back of the losses in the Sydney and Melbourne MPGs, the EMI dropped by 25 cents.”

He said the EMI recorded an overall loss of 24 cents for the series, closing at 1155 cents.”

Mr Plunkett said the crossbred offering was limited and what was available attracted strong competition.

“As a result all crossbred MPGs remained unchanged for the series.

“The lack of movement in the crossbred MPGs prevented a larger fall in the EMI.”

Mr Plunkett said the oddments were also in short supply and attracted good support, pushing prices higher. This was reflected in the three Merino carding indicators, which added an average of 28 cents for the series. These gains also prevented a larger fall in the EMI.