The six week run of wool price rises that took the Eastern Market Indicator (EMI) from 940¢ to 1048¢ two weeks ago came to a sudden halt this week when the Eastern Market Indicator (EMI) came back by 41¢ in Australian currency and by 41¢ in US currency. The sudden rise in the market had been a surprise to many in the trade; and there was uncertainty as to whether the factors driving the increase were short term or longer term.
The Eastern Market Indicator (EMI) fell by 2.2% on Wednesday. This was followed by a greater fall in the South African Market Indicator on Wednesday night and a fall of a further 2.1% in the Eastern Market Indicator (EMI) on Thursday.
There were falls across all micron ranges and wool types on both days. The only exceptions were among the oddments where some types were quoted as firm or unchanged. Merino wools were more affected than crossbreds.
Sellers reacted by passing in a greater proportion of the offering, particularly on Thursday when the Pass-In rate was 28.5% in Melbourne and 36.2% in Fremantle. Presumably, some of the passed-in wool was wool that had come onto the market in response to the recent upward movement in the market.
Despite this week’s fall, the Eastern Market Indicator (EMI) is 63¢ above where it was in mid-September. But, the fall has increased the difference between the current market and last year’s prices. The Eastern Market Indicator (EMI) is now 216¢ (-17.7%) less than in the same week last year and is 67¢ (-6.3%) less than at the start of the season. The WMI is 217¢ (-17.6%) less than in the same week last year and is 63¢ (-5.9%) less than at the start of the season.
In other countries, South African sales, the Cape Wools Indicator was down by 3.9% in Rand and by 3.5% in US currency since last week. In New Zealand, Wool Services International quoted fine crossbred fleece as “generally firm” and coarse crossbred fleece as “generally in buyers’ favour”.
Among other fibres, cotton Futures eased again during the week. December Futures closed at 69.58 US¢ on Friday, down by 1.1% since the previous week.
48,031 bales were on offer, compared with 51,336 bales last week. 22.4% were passed in, comprised of 16.4% in Sydney, 21.6% in Melbourne and 30.9% in Fremantle. Pass-in rates for Merino fleece and skirtings were 27.4% and 25.4%, respectively. 37,257 bales were cleared to the trade.
The year-to-date offering is is now 40,864 bales less (-5.8%) than at the end of the same week last year, as wool has come onto the market in response to the recent increases in price. The expected offering of 58,200 bales for the coming sale is the largest so far this season. It may not reach that level if this week’s falls lead to an increase in the number of bales withdrawn prior to sale.
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