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Prices start waning at Australian wool auctions
May '17
After a reasonably solid start to the selling week ending May 12, at Australian wool auctions, the last day saw that positive tone evaporate and the prices started to wane. The AWEX eastern market indicator (EMI) actually gained 5ac on the first day of selling, but lost 15ac on the last day to see a net retraction of 10ac/clean kg for the week.

The EMI closed at 1534ac clean kg. As a positive for local sellers, the USD EMI dropped off 16usc, aided mostly by forex rates, to 1128usc/clean kg which may help attract some overseas buyers back to the prompt market, the Australian Wool Innovation said in its ‘Wool Market’ weekly report for the 45th sale week of the year.

Negative forces combined late in the week, whereby a selection of harder to place wools was on offer in the two eastern centres. The Merino wools were mostly and heavily influenced by high vegetable matter (VM) levels. Additionally, the exporters were finding it difficult to attract much prompt business as the substantially weaker AUD v USD rates meant much cheaper offers were flowing into China which perhaps gave some incentive for those needing to buy a reason to wait for further reductions as is quite often the case, the report said in its analysis for the week.

Mixed signals were the commentary across the Australian wool show floors. Business demand for the super fine end (finer than 18.5 micron) of the merino sector appears to have become somewhat stagnant, as the ever increasing prices over the past four or so months has appeared to have met some price resistance for users of those types. The very best are still being sought heavily, but these sale lots are low in volume and that low availability is expected to remain that way for some time through Winter and into the Spring.

The two eastern selling centres had a stepped down pricing grid on the Merino sector seeing all categories basically 30ac cheaper for the week. Price adjustments in effect were not that radical, but still met some grower reluctance to sell, and an average pass in rate of 11 per cent ensued. That reluctance was far greater in the WA market though, as the 40 to 60ac cheaper market in that state saw the pass in rates surge to almost 28 per cent.

Away from the Merino fleece sector of the market, it was a much better story. All comeback and crossbred types (25 to 30 micron) managed to stay firm or even add to their values by a margin of 5 to 10ac clean kg. The carding market also defied the cheaper Merino fleece and also gained a general 5 or 10ac clean kg. All the indications see the steady demand remaining in both these sectors, particularly as volumes are starting to drop away in both Australia and South Africa.

Next week, a smaller volume of just over 36,000 bales is scheduled to sell. A big factor affecting pricing at the moment is the quality of the wool and the types on offer, and this variability will no doubt be a strong influence on prices. (RKS)

Fibre2Fashion News Desk – India

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