Renewed buyer vigour causes Australian wool prices to surge this week

25 Nov '21

2 min read

Pic: Moonbloom | Dreamstime.com

Season-long oscillations of wool pricing continued not only inter week but intra week at the latest Australian wool auctions. The first day of selling had a sale room atmosphere devoid of any confidence and saw prices depreciate. However, the tune changed to an overwhelming sense of conviction as buyers attacked the auction from the first lot on Wednesday.

“This renewed vigour from buyers caused the market to surge initially by 15/20ac but then proceeded to get progressively dearer throughout the day and ultimately wool markets all closed at the highest point. By the end of the day some individual well-measured sale lots were achieving upwards of 70ac better than the previous day,” the Australian Wool Innovation Limited (AWI) said in its commentary for sale week 21 of the current wool marketing season.

The Eastern Market Indicator (EMI) finished 1.3 per cent or 17ac higher to a closing basis of 1341ac/clean kg. The Western Market Indicator (WMI) moved positively by an 8ac margin for the week and concluded at 1401ac/clean kg. The forex rate of the Australian dollar (AUD) was weaker again versus the US dollar (USD) and helped keep in check the rise in most user currency options. The USD EMI gained 4usc to close at 967usc/clean kg.

China’s largest top making interest led the buying lists again and appeared to provide an assurance to others to spur them into action as well. Whilst new business was available from Tuesday onward, traders remained wary and it was mainly indents and manufacturers that concluded the majority of sales transactions and forced the improved pricing as a result.

“With the relatively large and unpredictable price swings on mainly the Merino fleece lots, it has been hard for exporters to extract consistent business and convert this to profitable contracts. This accounts for the larger than normal direct and indent buying activity from overseas interests. The fickle nature of retail at the moment also causes further uncertainty from the manufacturing sector right through to retail, leading to the just-in-time delivery mentality,” the AWI commentary added.

Merino fleece and skirtings sold dearer from 25 to 40ac in the East and 5 to 10ac dearer in WA. Cardings sold 10ac dearer and crossbreds unchanged.

Next week’s wool auction will see around 41,500 bales being offered on Tuesday and Wednesday.

Fibre2Fashion News Desk (KD)

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