Good week for oddments

25 Oct '10

3 min read

The Australian wool market finished 2.3% higher, on average, at sales in Sydney, Melbourne and Fremantle this week when the US exchange rate fell by 1.3%.

44,604 bales were on offer, compared with 40,174 bales last week. 4.3% were passed in, comprised of 3.1% in Sydney, 3.0% in Melbourne and 8.3% in Fremantle. Pass-in rates for Merino fleece and skirtings were 4.7% and 3.2%, respectively.

992 bales (2.2%) from the expected offering of 45,596 bales were withdrawn prior to sale and re-offered bales made up 7.6% of the final offering. 42,673 bales were cleared to the trade.

The New Zealand Merino Company also offered 3,205 bales in Melbourne on Tuesday of which 5.6% were passed in.

The US exchange rate momentarily reached 100.03¢ on Friday night, before easing back under 100¢. It fell sharply early in the week after Chinese official interest rates were raised by 0.25%, but regained some of those "losses" on Thursday.

It was another week of strong demand, price rises in all currencies and low pass-in rates. Growers saw more of the gains this week when the easing of the US exchange rate gave a boost to the AWEX EMI in Australian currency. Gains were again seen across all Merino types and micron ranges, with the greatest gains in the average AWEX MPGs occurring from 17.5 to 19.5 microns.

Good demand and price rises were also recorded at sales in other grower countries.

Demand for skirting types was very strong, with gains of around 20¢ greasy on Wednesday and a further lift on Thursday. Demand for crossbreds also held up, particularly among the medium and broad types. The changes in average AWEX MPGs were less at the fine end, but they were coming off large increases last week. It was also a good week for oddments, with increases across all types and the average AWEX Merino Cardings Price Guide up by 3.9%. This week's gains have taken this Indicator above its opening value for the first time this season.

Buyers for China were again dominant followed by buyers for Europe and India. The stronger demand from Europe has been a feature of the market this season.

Sales will be held in Newcastle (third sale), Melbourne and Fremantle next week, when 51,916 bales are currently rostered for sale. Present estimates for the following two sales (Weeks 18 and 19) are 45,940 and 44,020 bales, respectively; an increase of 3.0% over the three sale period when compared with last year. The New Zealand Merino Company is rostered to offer 2,500 bales in Melbourne next week.

In South African sales, the Cape Wools Indicator was up by 2.6% since last week in another strong market. The Rand depreciated by 1.7%against the US Dollar and by 0.5% depreciation against the Euro. 10,467 bales were on offer.

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Australian Wool Industries Secretariat

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