Wool buyers for China again dominant

01 Feb '10

2 min read

The Australian wool market finished 1.8% lower, on average, at sales in Sydney, Melbourne and Fremantle this week when the US exchange rate fell by 1.4%.

48,183 bales were on offer, compared with 54,410 bales last week, of which 16.4% were passed in, comprised of 12.6% in Sydney, 15.3% in Melbourne and 21.9% in Fremantle. Pass-in rates for Merino fleece and skirtings were 23.4% and 8.4%, respectively. 2,235 bales (4.4%) from the expected offering of 50,418 bales were withdrawn prior to sale and re-offered bales made up 10.1% of the final offering. 40,298 bales were cleared to the trade.

Last Thursday's easing in the market continued on Wednesday, before steadying on Thursday and finishing on a positive note after indications of some business done on Wednesday night. As is usually the case, the downward movement were generally greatest among fleece wool types, resulting in a 23.4% pass-in rate for these wools. The changes were also greatest at the fine end.

It needs to be remembered that this correction in the market followed some very steep rises; and that the closing EMI was still up by 41¢ (and 39¢ in US currency) since the closing values prior to Christmas.

The results for Merino skirtings types were more mixed this week, with prices holding or easing on Wednesday followed by good gains for most types on Thursday. Crossbred types also eased, with falls in their averages AWEX MPGs ranging from -2¢ (-0.6%) for 32 microns to -10¢ (-2.1%) for 28 microns. Oddments continued their strong run, with the average AWEX Merino Cardings MPG only moving down by 1¢ (-0.6%).

Buyers for China were again dominant, followed by buyers for India and Taiwan and for Europe.

Sales will be held in Sydney, Melbourne and Fremantle next week, when 50,434 bales are currently rostered for sale. Evidence of growers bringing additional wool onto the market continues with present estimates for the following two sales (Weeks 33 and 34) of 50,110 and 51,200 bales, respectively; an increase of 2.4% over the three sale period when compared with last year.

In South African sales, the Cape Wools Indicator was down by 4.7% since last week against a 1.7% depreciation of the Rand against the US Dollar and a 0.9% depreciation against the Euro. 8,400 bales were on offer.

Australian Wool Industries Secretariat

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