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Aussie wool prices down 5.6% last week
15
Apr '13
The AWEX Regional Indicators finished 5.6% lower, on average, at sales in Sydney, Melbourne and Fremantle last week.

The US exchange rate rose by 0.5%.It was a disappointing opening sale after the Easter break. Demand from all parts of the world was very subdued on each of the three selling days leading to overall falls on each day. Falls occurred across all wool types and micron ranges. It was also a large sale.

Grower reaction was strong, with the pass-in rate and withdrawn-prior-to-sale rate reaching their highest levels for the season. This was particularly so in Fremantle where 50.4% of the offering was passed in on Wednesday, 19.6% was withdrawn-prior to-sale on Thursday and 27.6% was passed-in on Thursday.

The only positive aspect was the increase in the WMI and Western MPGs on Thursday. It is difficult to know how to read this, given the trade reports of a general lack of inquiry at the moment. Also, the combination of the high pass-in and withdrawn rates created a marked reduction in the “real” availability of wool to the trade. Only 51.6% of the expected offering of 15,084 bales was sold during the week.

The principal market Indicators are now both less than they were at the start of the season. The EMI is down by 71¢ (-6.6%) and the WMI is down by 46¢ (-4.3%).It was a similar scene in South Africa, where the Cape Wools Indicator was down by 9.5%. In New Zealand, Wool Services International quoted mid-micron fleece (25.5 to 31.5 microns) as 6 to 8% cheaper and fine crossbred fleece (33 to 35 microns) as 2 to 4% cheaper.

Among other fibres, cotton Futures are down slightly on their pre-Easter values. July Futures were down by 0.7% to close at 87.62 US¢; and December Futures were down by 0.2% to 86.34 US¢ on Friday.

52,465 bales were on offer, compared with 43,730 bales at the last sale. 25.6% were passed in, comprised of 20.2% in Sydney, 20.6% in Melbourne and 41.0% in Fremantle. Pass-in rates for Merino fleece and skirtings were 33.7% and 22.4%, respectively. 39,014 bales were cleared to the trade.

The year-to-date offering is 17,533 bales more (+1.1%) than at the end of the same week last year. The current forecast offerings for the next three weeks 1.7% less than the same period last. Whether this will occur, or there may be a greater fall, will be influenced by what happens to the market in the short term. Recent history suggests that any further falls in the market will be reflected in an increase in the quantity of wool held back from sale.

The US exchange rate has risen over the Easter break, following the Reserve Bank’s decision to leave the official cash rate unchanged, apparent resolution in Cyprus and decisions by other countries to continue “printing money” to boost their domestic economies and to lower their exchange rate. This is most noticeable in Japan. The Australia /Japan exchange rate was 105.0 Yen on Friday, up from around 80 Yen at the beginning of October and from 100 Yen last Friday.

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