AWEX EMI up by 5¢

08 Sep '08

4 min read

The Australian wool market finished 0.4% higher, on average, at sales in Sydney, Melbourne and Fremantle this week

The AWEX EMI rose by 5¢ (+0.6%), ending the week at 855¢/kg. This reflected rises of 5¢ (+0.6%) in the North and 4¢ (+0.5%) in the South, with their corresponding Regional Indicators finishing the week at 892¢ and 823¢ clean, respectively. The Western Indicator rose by 2¢ (+0.2%), finishing the week at 834¢.

In a two day sale in Sydney and Melbourne, the AWEX EMI rose by 7¢ on Wednesday and fell by 2¢ on Thursday. The Western Indicator rose by 7¢ on Wednesday and fell by 5¢ on Thursday in a two day sale in Fremantle.

38,007 bales were on offer, compared with 37,985 bales last week, of which 10.2% were passed in, comprised of 8.0% in Sydney, 9.4% in Melbourne and 14.1% in Fremantle. Pass-in rates for Merino fleece and skirtings were 10.2% and 11.6%, respectively. 2,041 bales (5.1%) were withdrawn prior to sale and re-offered bales made up 13.1% of this week's offering.

The US exchange rate (source RBA) was 0.46¢ lower on Monday when compared with Wednesday of last week. It was then down by a further 0.72¢ on Tuesday, by 2.11¢ on Wednesday and up by 0.81¢ on Thursday to close at 83.35¢, down 2.48¢ (-2.9%) since the last sale.

The exchange rate against the Euro fell by 0.95 Euro cents (-1.6%) to close at 57.45 Euro cents on Thursday night. When looked at in other currencies, the AWEX EMI moved down by 17¢ (-2.3%) in US terms and by 5¢ (-1.0%) in Euro terms when compared with the previous sale.

The US exchange rate has fallen by 12.89¢ (15.5%) since Sale 01, when was 96.24¢.

This week's fall in the exchange rates was influenced by the Reserve Bank's decision to lower the official interest rate from 7.25 to 7.0% on Tuesday (the first decrease since December 2001) and the announcement on Wednesday of lower than expected economic growth in the June quarter. The recovery in exchange rates on Thursday suggests that they had over-reacted on Wednesday.

The market rose strongly in Australian currency on Wednesday in response to the 3.8% depreciation in the US exchange rate, with rises across all micron ranges and wool types, particularly for 19 and 21 to 23 micron wools. Some of these gains were lost on Thursday when the exchange rate firmed. However, the easing was less than change in the exchange rate and the EMI lifted by 6¢ in US currency.

Average AWEX Micron Price Guides (MPGs) were up by 9¢ for 17.0 microns and 17.5 microns, by 4¢ for 18.0 microns, by 7¢ for 18.5 microns, by 6¢ for 19.0 microns and by 7¢ for 19.5 microns. The 20.0 micron wool average MPG was up by 6¢ clean, 21.0 microns by 13¢, 22.0 microns was unchanged, 23.0 microns was up by 3¢, and 24.0 microns by 3¢.

Skirting types also generally firmed over the week, while oddments were in strong demand on both days leading to a 10¢ (2.5%) increase in the Merino Cardings average MPG. Crossbred average MPGs rose by 7¢ at the fine end, by 12 to 13¢ in the medium range and by 5¢ at the coarse end.

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