STRONG competition for a reduced bale offering from major traders and first-stage processors drove the Australian wool market higher this week.

The Australian Wool Exchange said the market rebounded this week, predominantly driven by increases in Merino fleece types.

With only Sydney and Melbourne in action this week, the national offering reduced to 31,097 bales, the smallest in nine months. Brokers passed in 9.6pc of the offering.

AWEX said the main buyer focus continued to be on good style wools (higher than 63pc dry yield), low vegetable matter wool (less than 1.2pc vm) and wool possessing favourable length and strength measurements.

“The competition on these lots was intense at times, and as buyers fought hard for these lots, the prices being achieved gradually increased as the sale progressed.

“Lesser style wool and higher vm lots also increased, as buyers attempted to secure quantity as the market rose,” AWEX said.

“By the end of the series, the individual Micron Price Guides (MPGs) in Sydney and Melbourne for Merino fleece types had risen by between 18 and 70 cents and the continued support in the finer microns now has the 17 micron MPG at a near four-year high.

“Merino skirtings tracked a similar line with the better types attracting the most support.”

AWEX said the oddment market was again the weakest performing sector this week. Reduced buyer demand for locks, stains and crutchings resulted in the Merino Carding (MC) indicators dropping by an average of 15.5 cents, and the falls in this sector prevented the EMI from recording a larger increase.

Competition on Merino types lifts market

Australian Wool Innovation trade consultant Scott Carmody said with just the two eastern centres operating this week, the reduced volumes available seemed to resonate positively with buyers.

“Price gains on most types were achieved and were significant in magnitude in many cases.

“With just three selling weeks left of this 2021/22 selling season, the trade purchases went through the 1.5 million-bale mark of wool sold this season at auction,” he said.

This represents a raw wool value approaching A$2.5billion.

Mr Carmody said one or two of the largest traders stepped up their buying of Merino types and the ensuing competition against the first-stage manufacturers led to the strong price gains.

“Purchasing though was again dominated by these direct to factory requirements from mills, adding to the three- week run of purchasing dominance of these users.”

Mr Carmody said the EMI’s closing mark of 1438c/kg clean is the highest closing the EMI on an A$ basis for four months and the second highest of the season.

“Despite the rising value of the A$ against most other currencies, the US$EMI outperformed the Aussie values and shot 2.2pc higher to US1036c/kg clean.

“At this level, the US$EMI is well above the current seasonal average of US1002c/kg clean.”

Mr Carmody said with the higher prices for a large portion of the offering, the clearance rates at auction improved strongly, strongly influenced by the 95.4pc clearance rate within the Merino fleece.

Fremantle returns to the selling roster next week pushing the national offering higher. Currently, there is expected to be 37,994 bales on offer in all three centres.