AWEX Eastern market indicator breaks new ground

Greater gains were achieved In US dollar terms, with the EMI racing 43usc higher to 1187usc clean/kg. The super fine Merino segment was a standout once again as common gains of 100ac clean/kg were registered, the Australian Wool Innovation said in its wool market report for the week ending Thursday, March 16, 2017.

"It is now apparent in the wool market that demand is far outstripping supply, particularly in the superfine merino types. Australia is producing approximately 3 per cent more wool than last year and over 6 per cent more first-hand wool has been offered so far at auction this year. Additionally, this season 4.6 per cent more wool finer than 23 micron has been produced, compared to the same time last season. Still, the price has increased substantially. Conversely, 4.1 per cent less wool broader than 24 micron has been produced, but unfortunately price has decreased significantly for these wools," the report said.

The surge in levels since the Christmas recess has come about due to the buying interest from mainly India and Italy. Buying from these countries has been competing strongly with China and coincides when most manufacturers' stock levels of raw material are at all time low. All wool users are reporting a steady and rising interest in Australian wool. The very public moves 6 months ago to finer microns for the Chinese government Railway and School uniforms orders has no doubt assisted demand for the long wool super fine sector.

Over 51,0000 bales is to be offered next week which is 20 per cent, or almost 9,000 bales, more than what was forecast last Friday. Pullbacks were being seen towards the close of selling this week, but this was understood to be mainly currency related as the Australian dollar strengthened significantly against all expectations as a result of the US interest rate increase. All three selling centres—Sydney, Melbourne and Fremantle—will be operating next week. (RKS)

Fibre2Fashion News Desk – India