Significant rises in Aussie wool market
Australian Wool Industries Secretariat Inc (AWIS) releases wool sale report for the week ending November 4.
The Australian Wool Exchange (AWEX) Regional Indicators finished 1.5% higher, on average, at sales in Sydney, Melbourne and Fremantle this week when the US exchange rate fell by 2.3%.
The sales opened well on Wednesday on top of last week's very strong market. There was another good lift in the Eastern Market Indicator (EMI), although assisted by a fall in the US exchange rate. Some of Wednesday's gains were cancelled out on Thursday. However, the EMI is at a very good level and is up by 5.7% in Australian currency and by 6.5% in US currency over the last two sales.
The larger increase in the Western Indicator on Wednesday was due to there being no sale in the West on the previous Thursday, when the Northern and Southern Indicators, both rose by 28¢.
The market was not helped by the fall in global economic confidence that arose from the latest events in Greece during the week and the negative reactions of other EU countries to these events.
38,655 bales were on offer, compared with 37,385 bales last week. 9.4% were passed in, comprised of 4.1% in Sydney, 9.6% in Melbourne and 14.7% in Fremantle. Pass-in rates for Merino fleece and skirtings were 7.2% and 7.1%, respectively.
35,018 bales were cleared to the trade.
The daily closing US exchange rate peaked at 106¢ on Friday of the previous week, following the positive outlook after the EU Leaders' Meeting on the EU debt crisis. A fall was expected this week when the Reserve Bank cut the Australian official interest rate by 0.25% on Tuesday. But, the biggest factor was the announcement by the Greek Prime Minister, George Papandreou, of his intention to hold a referendum on the austerity programme agreed to at last week's EU Leaders' Meeting. It now known that this will not occur, following pressure on Mr Papandreou from other EU leaders and from within his own party.
There were further rises across all Merino types and micron ranges on Wednesday, after the previous sale's large gains (when the EMI had picked up 57¢). The greatest gains on Wednesday were from 18 to 24 microns; and particularly for 22 and 23 micron wool. The increases at the fine end were more subdued. The easing on Thursday was across all Merino micron ranges, but all average AWEX Micron Price Guide (MPGs) finished above last week's levels by varying amounts from +0.2% to +1.7%.
Despite the negative global issues, the EMI remains at very good levels in both currencies. Also, the Cape Wools Indicator rose by a further 3.9% in South Africa this week on top of rises of 7.5%, 4.0% and 3.4% over the previous three weeks.
Skirtings again opened strongly on Wednesday and made good gains throughout the day. They continued in keen demand on Thursday with prices reported as remaining firm.
Crossbreds fared less well than Merino types on Wednesday, when they finishing down or unchanged. They were caught in the general easing in the market on Thursday. The week closed with their average AWEX MPGs down by around 1%. It is understood that the Australian crossbred prices are above those in New Zealand.