The Australian wool market marked the second straight week of price gains amid a smaller offering; Fremantle did not sell this week. The national offering was 15,375 bales, down 3,453 or 18.3%, which saw an improved clearance rate of 93.2% from 92.1% last week. This was the lowest national volume on offer since AWEX records began in 1995. The market often acts on its own, but in this series, the market followed conventional economic theory – reduced supply attracted stronger demand. Thus, the small supply sparked buying interest and as a result, prices rose across the board.
Meanwhile, the Australian Bureau of Statistics released the April export data this week. It was the first dataset to reflect any impact of Covid-19 on Australia’s wool exports. According to the data, about 93% of Australian wool was exported to China in April, compared with 77% in the previous nine months.
It was another better week, particularly in US currency terms where the exchange rate was up 3 cents, or 4.5%, at 69.40 US cents. Most microns recorded price rises, with the exception of the 16.5 µm and 21 µm in Melbourne which maintained last week’s levels. The merino skirtings, crossbred and oddment markets all performed strongly this week, again due to limited supply.
On Tuesday, the EMI gained 9 AUD cents to reach 1,179 AUD cents a kg clean, or up 23 US cents at 800 US cents. Wednesday recorded a smaller increase of 4 AUD cents but was up 21 US cents. Thus, the EMI gained 13 AUD cents, or 44 US cents, to close the week at 1,183 AUD cents a kg clean or 821 US cents a kg.
AWEX reported turnover of wool sold was AUD$19.62m, taking the season’s total to AUD$1,897.48m.
In Sydney, merino fleece lots strengthened on day one across all microns. On day two, finer (<18.5 µm) microns retreated somewhat while broader lots rose a few cents. Buyers continued to actively seek a limited offering of MF4 lots, particularly those with favourable additional measurements. Merino skirtings gained with fine (<17.5 µm), well-measured, low VM (<2.5%) lots up on day one and a bit further on day two. Crossbred lots recorded gains this week on the back of a limited offering. Oddments gained ground on day one across all categories and also maintained their value on day two. The Northern Regional Indicator gained 20 AUD cents to 1,232 AUD cents a kg clean with the clearance rate slightly down at 94% from 96% last week. The two-day auction saw 6,463 bales on offer with 903 bales withdrawn prior to sale.
In Melbourne, the sale on day one saw merino fleece lots maintain the previous week’s levels with minor price movements across microns. Stylish, higher yielding, well-measured lots attracted small premiums. Solid competition continued on day two, with broader lots (>18.5 µm) rising. Fine (<17.5 µm) merino skirtings were also in demand this week, with prices lifting on both days. Well-prepared crossbred lots were sought after, which pushed the 30 µm lots up for the week. Most oddment categories gained ground, particularly stylish lots with higher yields. The Southern Regional Indicator was up 9 AUD cents at 1,152 AUD cents a kg clean, with the clearance rate improving to 93% from 91% last week.
Next week will see the volume increase as Fremantle rejoins Sydney and Melbourne. About 24,140 bales will be available for sale.
