Wool prices up nearly 2% last week
The AWEX Regional Indicators finished 1.9% higher, on average, at sales in Sydney, Melbourne and Fremantle this week when the US exchange rate fell by 0.5%.
The AWEX EMI and Regional Indicators moved to new highs in Australian and US Currency.
The season average for the AWEX EMI (1130¢) is 259¢ (29.8%) above the average to the same time last year.
26,489 bales were on offer, compared with 22,821 bales last week (when only Sydney and Melbourne sold). 8.3% were passed in, comprised of 7.4% in Sydney, 5.5% in Melbourne and 17.3% in Fremantle. Pass-in rates for Merino fleece and skirtings were 9.7% and 6.9%, respectively.
24,286 bales were cleared to the trade.
The release of the latest bad Greek financial news on Wednesday (European time) had a major negative impact on the US exchange rate. This was expected, as the immediate loss of confidence and uncertainty caused a movement of currency from countries such as Australia to the safe havens of the US dollar, the yen, the Swiss franc and gold. The Greek news completely overshadowed the lift in the exchange rate on Wednesday that followed a speech by the Reserve Bank Governor in which he talked up the possible timing of the next rate rise.
The market started very strongly when sales commended on Wednesday, with gains across all types and nearly all micron ranges; and the EMI finishing up by 8¢ in Australian currency and by 26¢ in US currency. The momentum continued in Australian currency on Thursday, but eased in US following the uncertainty created by the news from Greece.
The Western market was very strong on Wednesday following the two week break, with the Western Region Indicator up by 58¢. This was well above the increase of 28¢ in the EMI since the previous Fremantle sale. The difference probably reflects both the greater proportion of mid-micron wool in the Fremantle offering, where the market is strongest at the moment, and the relative shortage of wool in the West with fortnightly sales between now and the mid-year break.
Competition remains very strong. The trade reports that this is most obvious among some types that are in demand, but in limited supply; for example the 17.5 MPG rose by 36¢ in the South on Thursday.
The EMI in US currency (1506¢) has risen by 94.7% since July compared with a 62.2% increase in Australian currency.
It was a very good week for skirting types, with prices rises of up to 30¢ greasy and greater, strong competition over both days and a lower pass-in rate than seen in recent weeks.
Crossbreds were also in keen demand after a quieter sale last week. Increases of 2.5% to 3.5% were reported in their average AWEX MPGs.
Oddments had another good week, with significant price rises across all types on Wednesday and further gains on Thursday. The average AWEX Merino Cardings Price Guide was up by 6.0%, taking the gain over the last three sales to 11.2%.
Buyers for China were dominant with good buying support from India, Europe and Taiwan.
Sales will be held in Sydney and Melbourne next week, when 22,714 bales are currently rostered for sale. Present estimates for the following two sales (Weeks 52 and 01 next season) are 29,270 and 36,300 bales, respectively; a decrease of 18.7% over the three sale period when compared with last year.
Sales are in recess in South Africa until 17 August.
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Australian Wool Industries Secretariat