The Australian wool market had a mixed week with a slight decline despite a further weakening of the local currency.
The Australian Wool Exchange (AWEX) Eastern Market Indicator (EMI) fell by 2 cents (1%) for the week to close on 2,088 cents per kilo clean on Thursday 6 September. However, in US dollar terms, the EMI declined by 19 cents (1.3%) to 1,497 US cents.
The Australian dollar against the US dollar continued to fall this week. Midway through the week it hit 71.5 US cents, a two-year low, before staging a recovery to finish at 71.68 cents late on Thursday.
AWEX said that the exchange rate gave overseas processors some assistance with their purchase cost.
This week’s total national offering was 38,516 bales, compared with 36,000 bales last week, resulting in a clearance rate of 96%.
The New Zealand Merino Company offered 479 bales in Melbourne on Wednesday in its first sale of the season, with a clearance rate of 86%.
The national offering was again lower compared to the same selling week last season. In the seven auctions held so far in the current selling season the cumulative national total is 39,000 bales lower than for the same period in 2017/18 – a decrease of 12.5%.
Sales were held this week at all three selling centres on Wednesday 5 September and Thursday 6 September. On Wednesday, the EMI rose by 11 cents to 2,101 cents but in US dollar terms fell by 4 cents to 1,512 US cents. On Thursday, the EMI declined by 13 cents to 2,088 cents and in US dollar terms decreased by 15 cents to 1,497 US cents.
The market got away to a good start on Wednesday as it resumed its upward trajectory from last week, before seeing its gains reversed the following day. Much of Thursday’s falls were associated with the presence of lesser types and lower yielding wools.
At the close, price variations were mixed with Melbourne showing 20 cent falls when compared to its unusual Friday sale last week, while Sydney recorded 20 cent gains when
compared to the Thursday.
There was no clear trend in the overall changes in the individual AWEX average Micron Price Guides (MPGs) for the Merino types. 16.5 microns fell by 53 cents (1.7%); 17 microns was unchanged; 17.5 microns declined by 20 cents (0.7%); 18 microns decreased by 2 cents (0.1%); 18.5 microns lifted by 3 cents (0.1%); 19 microns was up by 5 cents (0.2%); 19.5 microns lost 3 cents (0.1%); 20 microns increased by 2 cents (0.1%); 21 microns fell by 45 cents (1.9%); 22 microns declined by 20 cents (0.9%); 23 microns rose by 23 cents (1%); and 24 microns decreased by 42 cents (2%).
Merino skirtings found good support and were mostly firm on the previous sale.
The smallest national crossbred offering in three years had mixed results, firming in some areas and losing ground in others. Among the national AWEX average MPGs for the crossbred types, 26 microns lost 15 cents (1%); 28 microns was down by 2 cents (0.2%); 30 microns increased by 9 cents (1.2%); and 32 microns was unchanged.
Oddments prices were also mixed. The average Merino Cardings Price Guide was down by 1 cent.
AWEX reported that the total value of the wool sold this week was AU$94.1m (AU$2,577 per bale), taking the season total to AU$596.8m. Buyers for China were dominant, with support from buyers for India and Europe.
Next week (Week 11) the offering is forecast to be 34,582 bales, with Week 12 projected at 37,985 bales and Week 13 35,790 bales. The offerings are expected to be 11.7% less than in the same period last year.
