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Sentiment changes to positive at Australian wool auctions
Mar '18
Sentiment changes to positive at Australian wool auctions
After spending a few weeks in reverse, wool values lifted once again at Australian wool auction sales this week, due to a slight improvement in prompt demand, lighter volumes on offer and an advantageous foreign exchange (forex) rate. The Australian Wool Exchange-Eastern Market Indicator (AWEX EMI) regained all of the losses of last week.

Most types and descriptions recorded gains almost to the cent of the forex differentials, except 19 to 21 micron merino fleece which broke out beyond the percentage currency gain, indicative of some fresh demand. As a result, AWEX EMI appreciated by 27ac for the week and closed at 1778ac/ clean kg.

Overseas customers would have thought that they had a lucky break with the all of the major currencies opening the selling week at over 2 per cent to their advantage. The local wool market immediately kicked up by a similar magnitude but some of the keener overseas buyers had already locked in at the cheaper delivered price in USD and other currencies. After such a turbulent few days of forex fluctuations, the EMI movement when expressed in US dollars was far less excitable and ended up being just 2usc lower at 1377usc/clean kg, Australian Wool Innovation said in its ‘Wool Market’ report for sale week 38 of the current season ending March 23, 2018.

Merino wool movements during the week were all positive with buyers very keen on wools with the better tests or containing light vegetable matter (VM) readings. “This demand was witnessed across all micron brackets and gains on these wools was initially 60 to 80ac but a pullback was recorded on the final day as sale rosters were released showing a massive increase of over 21 per cent or 8,000 bales for next week. A strengthening dollar also slowed interest, but it was primarily the pressure relief of more wool than expected available for prompt buying that hampered the rising market,” the report said.

The crossbred sector had a good week as well, and price gains of 20ac/clean kg were recorded. Importantly it was the better prepared clips that took the best possible money out of the buyers’ pockets as un-skirted clips remain relatively out of favour and copping discounts above and beyond what it would have possibly cost to prepare the clips to the code of practice. Cardings enjoyed similar gains of 20 to 30ac/clean kg.

For next week, 47,000 bales are rostered for auction. The large volume is expected to test current demand levels, according to AWI. (RKS)

Fibre2Fashion News Desk – India

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