The Australian wool market suffered a correction this week as it lost some of last week’s spectacular gains.
The Australian Wool Exchange (AWEX) Eastern Market Indicator (EMI) fell by 48 cents (2.3%) for the week to close on 2,068 cents per kilo clean on Wednesday 22 August. However, the EMI remains at a record high after last week’s surge of 126 cents.
Currency movement had a significant impact again this week. After weakening last week, the Australian dollar against the US dollar finished 0.81 cents (1.1%) higher this week to close at 73.56 cents on Wednesday. As a result, the decline in the EMI was significantly less in US dollar terms than in local currency, falling by 18 cents (1.2%) to 1,519 US cents.
The Western Region had a one-week recess this week to allow interested parties to attend the planned Wool Week activities in the Eastern States.
Sales were held at Sydney and Melbourne on Tuesday 21 August and Wednesday 22 August due to the Wool Week activities taking place on Thursday.
On Tuesday, the EMI fell by 41 cents to 2,075 cents, and in US dollar terms declined by 11 cents to 1,526 US cents. On Wednesday the EMI fell by a further 7 cents to 2,068 cents and in US dollar terms also dropped by 7 cents to 1,519 US cents.
The national offering was reduced again this week, due in part to the recess in Fremantle, resulting in a national offering of 29,691 bales, compared with 36,302 bales last week. The clearance rate was 89%.
Despite the reduction in quantity, the market could not sustain the rapid upward momentum experienced the previous week. AWEX reported that buyers adopted a much more cautious approach, resulting in price corrections across the entire Merino spectrum. The losses felt in the Merino sector were generally 60 to 90 cents. The lesser style types and wools with less favourable additional measurement results were the most heavily discounted.
The downward movements in the market were reasonably even across the Merino micron ranges. Among the national AWEX average Micron Price Guides (MPGs) for the Merino types, 16.5 microns fell by 108 cents (3.4%); 17 microns was down by 91 cents (3%); 17.5 microns declined by 76 cents (2.7%); 18 microns decreased by 68 cents (2.5%); 18.5 microns dropped by 70 cents (2.7%); 19 microns was down by 73 cents (3%); 19.5 microns lost 64 cents (2.6%); 20 microns decreased by 84 cents (3.5%); 21 microns fell by 79 cents (3.4%); 22 microns dropped by 79 cents (3.4%); and 24 microns was down by 54 cents (2.5%). No MPG was quoted for 23 microns.
The skirting market also tracked downwards this week. Prices were generally reduced by 40 to 70 cents, with the losses felt across all types and descriptions, regardless of style or
vegetable matter content.
The crossbreds also suffered corrections but not to the same extent as the Merinos. The
losses were generally 15 to 25 cents, with all types and descriptions recording a similar fall.
Among the national AWEX average MPGs for the crossbred types, 25 microns fell by 1 cent (0.1%); 26 microns declined by 17 cents (1.1%); 28 microns was down by 14 cents (1.5%); 30 microns decreased by 25 cents (3.5%); and 32 microns lost 23 cents (4.4%).
The AWEX Merino Cardings Price Guide was down by 6 cents to 1,537 cents.
AWEX reported that the total value of the wool sold this week was AU$63.5m (AU$2,396 per bale), taking the season total to AU$415.4m, 14% higher than at the same time last year. Buyers for China were dominant, with support from buyers for Europe and India.
Fremantle returns to the fold next week (Week 9), resulting in an increase in quantity. Week 9 is a designated Australian superfine sale. Currently, there are 34,960 bales rostered for sale. The projection for Week 10 is 37,280 bales, and Week 11 33,988 bales.
The expected offerings for the next three weeks average 17.8% less than in the same period last year.
