A BIGGER lower quality offering helped halt the upward trajectory in wool prices in Australia this week.
Merino fleece prices dropped 10-50 cents as brokers passed in 12.1 percent of the 21,785 bales offered, 6310 more than last week.
AWEX senior market analyst Lionel Plunkett said after two consecutive weeks of rises the Australian market was unable to continue its upward trajectory this week, instead recording general losses.
“The market opened strongly in Melbourne, with very little change recorded from the previous week,” he said.
The Western region, which did not sell in the previous week, also opened strongly but prices reduced as the sale progressed.
“The market continued to retract on the second day of selling, so much so that by the end of the week the individual Micron Price Guides (MPGs) in Sydney and Melbourne recorded losses of between 10 and 49 cents.
“Many buyers contributed these losses to the inability to average the required 70percent washing yield required for many Chinese orders, due to the large amount of lower yielding wools on offer,” he said.
“In contrast to this, the limited number of high yielding/better style wools attracted very strong buyer demand and were the least affected by the falling market.”
Mr Plunkett said the AWEX Eastern Market Indicator fell by 12 cents for the series to close at 1171c/kg clean.
“As opposed to the previous series, due to minimal currency movement, when viewed in US$ terms, the EMI fell by a similar amount, the EMI fell by US8 cents to close at US813 cents.”
Crossbred wools recorded positive movements for the week, with the crossbred MPGs rising by 5 to 10 cents for the series, he said.
“The only exception was the 26 MPG in the north, which was unchanged.
“The positive movements in the crossbred sector prevented the EMI from falling further than it did,’ Mr Plunkett said.
Oddments also recorded upward movements, with the three carding indicators rising by an average of 14 cents, again preventing the EMI from a larger fall.
In his weekly newsletter, National Council of Wool Selling Brokers executive director Chris Wilcox said with the smaller decline in the EMI in US$ terms, the EMI remained well above the level of a fortnight ago in. He said the A$ was a little weaker against the Euro and Renminbi, and the EMI fell by 13 €cents to 715 €cents/kg and by 81 RMB to 5738 RMB/kg.
The Fremantle region does not sell again next week and as a result the national quantity reduces again. There is currently 16,819 bales on offer, with only Sydney and Melbourne in operation.
Click here to see the latest AWEX Micron Price Guides.
Source: AWEX, NCWSBA.