Wool market down 3.5% for week
The Australian wool market finished further 3.5% lower, on average, at sales in Sydney, Melbourne and Fremantle this week, taking the two week fall to -6.1% against a 3.4% appreciation of the US exchange rate.
The AWEX EMI fell by 29¢ (-3.6%), ending the week at 783¢/kg. This reflected falls of 33¢ (-3.9%) in the North and 26¢ (-3.3%) in the South, with their corresponding Regional Indicators finishing the week at 806¢ and 764¢ clean, respectively. The Western Indicator fell by 26¢ (-3.3%), finishing the week at 769¢.
In a two day sale in Sydney and Melbourne, the AWEX EMI fell by 17¢ on Wednesday and by 12¢ on Thursday. The Western Indicator fell by 26¢ on Wednesday in a one day sale in Fremantle.
40,111 bales were on offer, compared with 42,443 bales last week, of which 17.9% were passed in, comprised of 12.7% in Sydney, 16.3% in Melbourne and 29.0% in Fremantle. Pass-in rates for Merino fleece and skirtings were 23.3% and 9.8%, respectively. 1,894 bales (4.5%) were withdrawn prior to sale and re-offered bales made up 8.8% of this week's offering.
The US exchange rate (source RBA) was 0.57¢ higher on Monday when compared with Thursday of last week. It was then down by 0.05¢ on Tuesday, up by 0.50¢ on Wednesday and down by 0.77¢ on Thursday to close at 77.79¢, up 0.25¢ (+0.3%) since the last sale. The exchange rate against the Euro fell by 0.05 Euro cents (-0.1%) to close at 56.25 Euro cents on Thursday night. When looked at in other currencies, the AWEX EMI moved down by 21¢ (-3.3%) in US terms and by 17¢ (-3.7%) in Euro terms when compared with the previous sale.
This week's market was another case of two different fibre diameter ranges with the fine wools weakening again and medium and broad Merino types hanging on reasonably well. Wools up to 19.5 microns have come back by around 10% in the last two weeks, whereas 20 micron wools have come back by 5% and 21 to 24 micron wools by around 3%. The greater pressure on the finer types, and the fleece wools in particular, saw strong grower resistance to sell at these prices. The average pass-in rate for fleece wools was 23.3% and was said to be higher for fine wools.
Changes in the Average AWEX Micron Price Guides (MPGs) for Merino wools varied from -5.5% (18.5 microns) to 2.2% (20.0 and 24.0 microns). Average MPGs were down by 67¢ clean for 16.5 microns, by 64¢ for 17.0 microns, by 61¢ for 17.5 microns, by 54¢ for 18.0 microns, by 55¢ for 18.5 microns, by 37¢ for 19.0 microns and by 31¢ for 19.5 microns. The 20.0 micron wool average MPG was down by 18¢ clean, 21.0 microns by 22¢, 22.0 microns by 21¢, 23.0 microns by 19¢, and 24.0 microns by 16¢.
Prices for skirting types weakened, apart from in the South on Thursday. Prices for these types are still relatively good after several weeks of strong competition and so had a good clearance rate to the trade, with only 9.8% passed in. Fine crossbred types did reasonably well, withtheir average AWEX MPGs easing by around 2.5%. Medium and coarse crossbred average AWEX MPGs were down by 3.5 to 6.9%. Oddments generally held their ground, apart from an easing in the North on Thursday. The average AWEX Merino Cardings MPG was down by 2¢ (-0.4%)
Buyers for China dominated sales this week followed by good support from India.
Sales will be held in Sydney and Melbourne next week, when 32,420 bales are currently rostered for sale. Present estimates for the following two sales are 37,325 and 26,800 bales (Sydney and Melbourne only selling), respectively. An increase of 20.4% over the three sale period when compared with last year.
South African sales are in recess until 10 June.
Australian Wool Innovation