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Sluggish Chinese trading demand led to fall in prices at this week’s Australian wool auctions across most types. As the week progressed, competition dwindled to just a few of the higher volume buyers, with European and Indian activity helping the better types to keep their losses relatively low, according to the Australian Wool Innovation (AWI).
The Eastern Market Indicator (EMI) fell 1.2 per cent or 16ac this week to close at 1323ac/clean kg. The forex rate of the AUD strengthened against all currencies used in wool trading and purchasing. In a rare event, all forex appreciation against USD, Chinese yuan and the Euro was the identical order of 0.8 per cent week to week. The market falls in USD were therefore lessened comparatively to AUD and a fall of 0.4 per cent or 4usc to 971usc clean/kg occurred. The Western Market Indicator (WMI) dropped 21ac to 1349ac clean/kg.
“Chinese top makers and Chinese indent buyers were the most active this week besides the usual two or three largest trading exporters. Most exporters reported difficulty in accepting any bids on offer, so indent buyers appeared to receive the fresh orders. Without new Chinese forward contracts to act on, many sale room buyers found it hard to continue to support the market with any great confidence, and operating to European and Indian orders appeared to underpin the market somewhat,” the AWI said in its commentary for sale week 15 of the current wool marketing season.
Sluggish Chinese trading demand led to fall in prices at this week’s Australian wool auctions across most types. As the week progressed, competition dwindled to just a few of the higher volume buyers, with European and Indian activity helping the better types to keep their losses relatively low, according to the Australian Wool Innovation (AWI).
“The current price gaps in the Merino market are significant at the moment. Whilst the leading price indicator is recovering nicely, the makeup of that indicator shows quite some disparity. Drawing a line through the 19.5 micron mark, the types finer than this are being well sought and for each point of a micron there is an average differential of around 40ac all the way down to 15 micron. For wools broader than 19.5 micron falls occur to around 10ac per point of a micron. In the crossbred wool section more emphasis is placed on other qualities, but a price gap for fibre diameter of 5ac is apparent,” the AWI commentary added.
Despite the drifting prices on offer, grower sellers still disposed of 86.1 per cent of what was put up for sale during the week. There was a variation between East and West selling centres of that clearance rate though, particularly on Merino fleece and skirtings sectors which saw Sydney and Melbourne pass in 11.6 per cent whilst the West had 17.1 per cent of those wools failing to meet reserves. This is most likely due to the micron average of the East being sub 19 micron whilst the West was around a 19.5 micron average with broader merino types less sought at the moment compared to their finer counterparts.
For the sale week 16, around 38,000 bales would be on offer for auctions on Tuesday and Wednesday.
Fibre2Fashion News Desk (RKS)
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