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Wool prices lift slightly as growers hold back bales

Sheep Central, March 26, 2021

WOOL growers withdrew or refused to sell nearly a quarter of the bales catalogued bales for auctions across Australia this week.

The Australian wool market has recorded an overall positive result this auction series, but this after 13.6 percent of the national offering was withdrawn from sale, and 9.4pc was passed in.

The Australian Wool Exchange said 46,578 bales were gazetted for sale, but after 13.6pc of the national offering was withdrawn prior to sale, the actual offering fell to 38,564 bales.

“Although the national offering reduced, bales available at auction for this season continues to track well above the previous season, as wool on hold continues to find its way to market.

“Compared to the corresponding sale of the previous season, there has been 58,749 more bales offered, this is a 5pc increase,” AWEX said.

The main buyer interest was for good style wools (MF5 and better), particularly those with favourable additional measurement results.

“These wools generally sold at levels 10 to 30 cents above those achieved in the previous series and were the impetus for the gains experienced in the individual Merino Price Guides (MPGs),” AWEX said.

“The MPGs across the country for 19.5 micron and finer gained between 5 and 42 cents.

“Lesser style wools (MF6/7) did not receive the same level of buyer support and were highly irregular but trending lower.”

AWEX said the gains in the Merino fleece MPGs, combined with gains in other sectors helped to push the AWEX Eastern Market Indicator up by 8 cents to 1285c/kg clean, a modest 0.6oc rise.

“Due to large currency movement — the Australian dollar fell by 2.27 US cents compared to last week, a fall of 2.9pc.

“When viewed in US dollar terms, the EMI fell by US23 cents, closing the week at US977 cents, a 2.3pc drop.”

AWEX said the skirtings tracked a similar path to the fleece, with prices generally rising between 10 and 20 cents. The crossbred sector recorded minimal movements for the series and the crossbred MPGs in the eastern centres moved between -3 and +8 cents.

Ongoing logistic issues a threat to further price rises – AWI

AWI trade consultant Scott Carmody said a healthy foreign exchange (forex) advantage and a significant reduction in eventual volumes at sales rostrums were largely responsible for prices lifting a few cents this week.

“In all other currencies used in wool trading, prices fell by 2 to 3 percent, which reflects the slowing of current enquiry from overseas.

Mr Carmody said with the US EMI shifting downward Australia’s global trading partners were the recipients of a cheaper buy-in price for orders.

However, he said despite wool prices now performing relatively well in the light of reduced consumer access to wool, ongoing and seemingly worsening logistic issues might hamper recovery attempts for prices to higher levels of return.

“Delays in shipments are verging on chronic, with exporters receiving multiple cancellations of sailings which leads to weeks, and in some instances, a month of hold-ups, tying up valuable finances.

“Reports indicate the notice time is extraordinarily short with wool dumped and ready at port being jettisoned off delivery and a new schedule “subject to change” being issued,” he said.

“Some exporter’s containers have been canned three times and are still awaiting discharge.

“The shipping disruption obviously effects the main export destination of China, but harder impacts are being felt upon the Indian and European importers,” Mr Carmody said.

“Available vessels setting sail for those nations are much scarcer and also the space available on those limited vessels is ever tightening.

“As the market has shown, when those nations are in the room competing, the wool price is the beneficiary of that additional bidding.”

AWEX said next week’s potential national offering is currently at 48,829 bales for auctions in Sydney, Fremantle and Melbourne.

Click here to read the latest AWEX Micron Price Guides.

Sources – AWEX, AWI.

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