AWEX wool indicator closes 1.6% lower last week

11 Jun '12

4 min read

One can only describe the global economic events of the last week as turmoil. Very strong negative sentiment at the end of last week was gradually replaced by improved economic confidence this week.

This was particularly so when Ben Bernanke indicated that the United States is looking at a third period of "quantitative easing" (printing money) and China lowered interest rates by 0.25%. These factors combined with very good April quarter economic outcomes in Australia to lift the US exchange rate by 2.4% for the week.

Skirting prices eased on both days, with the poorer types most affected. There appeared to be more willing sellers this week, as the pass-in rate of 13.8% was well below that seen in recent weeks; and was to similar to the pass-in rate for fleece wools.

Crossbreds had another reasonable week, with the changes including some small increases in some average AWEX Micron Price Guides (MPGs).

It was a steadier week for oddments after some weeks of downward movements. Buyers for China were dominant this week, followed by strong support from buyers for India and Taiwan.

Sales will be held in Sydney, Melbourne and Fremantle next week, when 33,926 bales are currently rostered for sale. Present estimates for the following two sales (Weeks 51 and 52) are 24,965 and 34,000 bales, respectively; an increase of 15.9% over the three sale period when compared with last year.

In South African sales, the Cape Wools Indicator was down by 1.7% since last sale against a 0.3% depreciation of the Rand against the US Dollar and a 1.0% appreciation against the Euro. 12,424 bales were on offer. South African sales are now in recess until 15 August.

Australian Wool Industries Secretariat Inc (AWIS)

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