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Wool prices falter with extra bales and currency changes

Sheep Central October 28, 2022

 

AUSTRALIAN wool prices faltered under the influence of volume and currency changes as supplies continued to be disrupted by flooding in the eastern states.

The Australian Wool Exchange said the market this week recorded its first overall loss in three weeks.

“As the market rose over the previous two selling series, so to did the number of people wishing to offer their wool.

“As a result, the national offering rose to 41,056 bales (up 5649 bales),” AWEX said.

AWEX said although the larger offering received solid buyer support, the prices on offer were noticeably lower from the outset. Brokers passed in 17.7 percent of the offering.

“By the end of the first day the individual Micron Price Guides (MPGs) across the country for Merino fleece had fallen by between 3 and 49 cents, the only exception was 19 micron in Sydney which remained unchanged.

“The AWEX Eastern Market Indicator (EMI) dropped by 11 cents for the day.”

On the second day of selling, prices continued to ease, despite widespread competition and robust bidding, AWEX said.

“The movements in the MPGs ranged from unchanged to -43 cents.

“The skirtings followed a similar path to the fleece with general falls of between 20 and 40 cents for the week.”

AWEX said the crossbred MPGs dropped by between 8 and 25 cents. The oddments defied the trend of the other sectors.

“Strong demand for locks, stains and crutchings, particularly those carrying less than 2pc vegetable matter, pushed prices higher.

“This was reflected in the three Merino carding indicators (MC) which rose by an average of over 14 cents,” AWEX said.

“By the end of the series the EMI had fallen by 23 cents, closing at an even 1300 cents/kg clean.

“The EMI is still slightly below the level it was at the corresponding sale of the previous season,” AWEX said.

“Twelve months ago, the EMI was sitting at 1333 cents/kg clean.

The Western market Indicator fell 42 cents to 1427c/kg clean.

Next week’s offering increases again despite the weaker market and there are expected to be 43,036 bales on offer in Sydney, Melbourne and Fremantle. The sales will be conducted on Wednesday and Thursday to accommodate a public holiday in Melbourne on Tuesday.

Strengthening of the Australian dollar played a part – AWI

Australian Wool Innovation trade consultant Scott Carmody said general falls of 40c/kg clean apart from in the carding sector and the high passed in rate, more than A$50 million of wool exchanged ownership this week.

“Much of the auction price losses came about from the week to week strengthening of the AUD against the USD (+1.5pc).

“This change in foreign exchange saw the USD price almost maintained (-3USc), so demand from those US dollar-using customers (China) remains similar, but the overarching purchasing factors remained in place as the mainly Indian and European destination operators dominated the volume on offer, particularly on the better specified sale lots.,” he said.

Mr Carmody said Merino fleece lines finer than 18 micron drifted downward the most and saw values decline by around 65 cents on average.

“The better types and the lowest types held on much better, with price degradation on the mid-level standard China suitable wools types dragging the individual micron price guides back.

“In this superfine and ultrafine micron area, premiums are still available for non-mulesed declared lots, but very little evidence for accreditation scheme wools has been witnessed the past three weeks or so,” he said.

He said the broader than 18.5 micron Merino types were a general 40 cents cheaper for the week.

“The price falls were more consistent through all quality differences with only the very best sale lots escaping heavier falls but were still generally 15/20 cents lower for the week.

“The 19.5 to 20.5 micron area appeared to be popular with the sub-continent users and some top-quality and well-specified wools were purchased in volume.”

Mr Carmody said vrossbred wools of all types and descriptions sold 10-15 cents lower, but pleasingly a slight improvement in quality is becoming apparent.

“The past 12 months has seen much of that sector heavily influenced by wet weather.”

With ongoing and widespread flooding across large parts of south eastern Australia, shearing and therefore the flow of wool onto the market is set to be significantly disrupted, he said.

Sources – AWEX, AWI.

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