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Wool prices soar to record levels as exporters battle Chinese interests

by Sheep Central, 10 November 2017

WOOL prices soared to record levels this week, with Merino prices lifting 40-100 cents and crossbred rates rising 50-80 cents.

The Australian Wool Exchange said the AWEX Eastern Market Indicator recorded a 58-cent rise to finish the week at 1681c/kg clean, a new record high.

The overall passed in rate was only 1.3 percent, the lowest figure since August 2015, showing grower willingness to accept the current price levels, AWEX said.

Australia’s largest exporter, Techwool Trading, dominating bidding on Merino fleece and skirtings  and on crossbred types.

AWEX said all Merino types and descriptions were hotly contested, generally pushing prices up by 40 to 60 cents, with some finer specialty types increasing by over 100 cents.

“As in recent weeks, wools with favourable length and strength results were the most highly sought after; however, this sale many unfavourable test results were “overlooked” as buyers attempted to secure market share in a rapidly rising market.”

Skirtings followed a very similar path to the fleece. Prices generally increased by 40 to 60 cents for the week, FNF (less than 2pc) coming under the most buyer interest, AWEX said.

“After many weeks being out performed by their finer cousins, the crossbreds managed to record higher general increases than the merino sector.

“The entire crossbred sector, from 25 micron all the way through to 32 micron enjoyed price rises of 50 to 80 cents,” AWEX said.

The oddment market continued its rapid rise again this sale. A limited quantity came under intense widespread buyer competition, all types and descriptions made significant upward movement. AWEX said generally, prices increased by 40 to 80 cents for the week pushing the three carding indicators up by an average of over 62 cents.

Growers get 30pc gain in $A value of clip

The Australian Wool Innovation weekly market report said growers selling this week, relative to the same time last year, received a 30pc gain in Australian dollars terms for their wool clip.

“The current market indicator is just shy of 400c/kg clean higher than at the same period of last season.

“In US dollars the gains are similar with a US39 cent appreciation this week, as the EMI in US dollars closed at US1291 clean/kg,” AWI said.

“This level represents a year on year gain of 31pc or a price that is over US300 higher for the many overseas buyers that use that currency.”

AWI said the start of the selling week had buyers and exporters expecting an impending price rise, but what was not predicted though was the severe nature of the price rise and the speed in which the levels accelerated away from most participant’s willingness to pay that money.

“As the price moved rapidly upwards, more buyers slammed the bag and discontinued their purchasing activity.

“Conversely though, the top four buyers stayed true to their course and dominated the buying lists.”

AWI said in the Merino offerings, the top four buyers purchased about 50-60pc of the offering between them, and in the crossbreds, around 70pc was bought by just the top four interests, highlighting the very restrictive nature of the buying action this week.

“Chinese interests came to the fore this week, but it was Australia’s largest exporter that dominated the sale rooms across the nation and remarkably across all wool sectors.

“It was only the carding wools that saw them deposed from the top of buying lists, but even then they were runner-up.”

In the Merino fleece segment of the selection, AWI said the largest Chinese indent operator provided the stiffest of competition and mainly on wools broader than 18.5 micron.

“Similar to last week’s sales, the major top makers were also interested, but became much more price resistant as the heavyweights of indent buying and traders.

“In a designated superfine sale in Sydney, Italian interests again monopolised the better wools finer than 19 micron.”

But AWI said strangely, it was in Melbourne that the largest of increases were extracted from buyers pockets for super fine categories, where wools of 18 micron and finer were upwards of 140c/kg clean dearer for the week.

Click here to see the latest AWEX Micron Price Guides.

Sources: AWEX, AWI.

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