The Australian wool market experienced a disappointing week following last week’s strong increases. A small lift in the Australian Wool Exchange (AWEX) Eastern Market Indicator (EMI) was largely driven by substantial rises among the crossbred types, as the Merino fleece sector generally recorded losses.
The EMI rose by 2 cents (0.1%) for the week to close on 1,860 cents per kilo clean on Thursday 29 November. In US dollar terms, the EMI gained 14 cents (1%) to finish on 1,361 US cents.
The Australian dollar against the US dollar finished 0.64 cents (0.9%) higher to close at 73.14 US cents on Thursday, the highest closing rate since early August. Analysts said that the strengthening appeared to be a consequence of a weaker US dollar.
This week’s total national offering was 34,513 bales, compared with 31,889 bales last week. The clearance rate this week was 92.3%.
Sales were held at all three selling centres on Wednesday 28 November and Thursday 29 November. On Wednesday the EMI rose by 2 cents to 1,860 cents but in US dollar terms fell by 1 cent to 1,346 US cents. On Thursday the EMI stayed firm on 1,860 cents and in US dollar terms gained 15 cents to finish on 1,361 US cents.
This week’s sales started well on Wednesday, with good demand for the better wools, but eased later in the day in the West, where the individual average AWEX Micron Price Guides (MPGs) all fell by at least 30 cents. A decline in the West can be a worrying sign for the following day, but there turned out to be gains of around 18 cents in the individual MPGs in the West on Thursday.
AWEX reported that nationally the Merino fleece sector failed to attract the same amount of support that it enjoyed during last week’s sale. The result was widespread price reductions, with inferior style wool and wool with unfavourable additional measurement results the hardest hit in the falling market. The MPGs for 18.5 microns through to 21.5 microns generally lost between 15 and 30 cents for the series.
16.5 microns fell by 12 cents (0.5%); 17 microns was down by 3 cents (0.1%); 17.5 microns climbed by 5 cents (0.2%); 18 microns increased by 13 cents (0.6%); 18.5 microns fell by 10 cents (0.4%); 19 microns declined by 14 cents (0.6%); 19.5 microns lost 24 cents (1.1%); 20 microns decreased by 22 cents (1%); 21 microns decreased by 24 cents (1.1%); and 22 microns fell by 3 cents (0.1%).
However, the skirtings went against the trend of the fleece types and added further gains to those achieved last week. Prices achieved were generally 10 to 30 cents above those achieved at the previous sale, with wools carrying less than 2% vegetable matter (VM) enjoying the largest gains.
For the crossbred types, the large rises were driven by strong demand, which helped push prices for wool of 28 microns and finer up by 80 to 90 cents. Better prepared lines received the greatest support and as a result enjoyed the largest increases. Among the average AWEX MPGs for the crossbred types, 26 microns rose by 109 cents (8.8%); 28 microns rose by 85 cents (10%); and 30 microns increased by 19 cents (2.6%).
The carding market continued its upward trend following on from the large gains experienced last week. Locks, stains and crutchings generally rose by 10 to 25 cents. These
rises helped pushed the AWEX Merino Cardings Price Guide up by 12 cents.
AWEX reported that the total value of the wool sold this week was AU$65.2m (AU$2,045 per bale), taking the season total to AU$1.398bn (AU$2,275 per bale). Buyers for China were dominant, with support from buyers for Europe and India.
Looking ahead, there are only two more sales in the pre-Christmas period. The expected offerings are higher than in recent weeks, but are still expected to be 18.6% less than in the corresponding weeks last year.
The offering for next week (Week 23) is forecast to be 39,510 bales, with the projection for Week 24 41,452 bales.
