Wool market finishes 1.1% lower

20 Sep '10

3 min read

The Australian wool market finished 1.1% lower, on average, at sales in Sydney, Melbourne and Fremantle this week when the US exchange rate rose by 2.2%.

39,016 bales were on offer, compared with 37,063 bales last week. 14.2% were passed in, comprised of 10.0% in Sydney, 12.3% in Melbourne and 23.0% in Fremantle. Pass-in rates for Merino fleece and skirtings were 16.8% and 11.7%, respectively.

1,448 bales (3.6%) from the expected offering of 40,464 bales were withdrawn prior to sale and re-offered bales made up 6.8% of the final offering. 33,474 bales were cleared to the trade.

Exchange rates were up again this week, with the US exchange rate at its highest level since April and the Euro exchange rate reaching its highest ever level in the last week. Financial commentators attribute the current support for the A$ to good economic data from China and investors moving away from the US$.

It was generally a good week for wool, with the EMI in US up by 11¢ on Wednesday. But, this was masked by the 2.4% rise in the US exchange rate. The market operated at a similar level on Thursday, where the slight easing in the US exchange rate saw a 2¢ lift in the EMI in A$, and lifts in most individual Indicators. The finer wools had a slightly better week than the medium and broader wools.

Prices for skirtings finished the week on a firm note after a mixed day on Wednesday, when prices generally eased, particularly in the South and the West. Crossbred average AWEX MPGs eased in AS terms, but were slightly up in US currency. Oddments eased again this week, with the AWEX Merino Cardings Indicator down by 1.2% in A$ terms.

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

Sales will be held in Sydney, Melbourne and Fremantle next week, when 46,106 bales are currently rostered for sale. Present estimates for the following two sales (Weeks 13 and 14) are 43,600 and 47,400 bales, respectively; an increase of 6.1% over the three sale period when compared with last year.

The New Zealand Merino Company is rostered to offer 2,850 bales in Melbourne next week and 2,500 bales in Week 14.

In South African sales, the Cape Wools Indicator was down by 4.1% since last week's sale against a 2.5% appreciation of the Rand against the US Dollar and a 0.5% appreciation against the Euro. 5,218 bales were on offer.

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Australian Wool Industries Secretariat

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