Prices decrease at Australian wool auctions this week
November 22, 2019 - Australia
The gains of last week were eliminated entirely as values fell 15 to 25ac across all the wools on offer at the Australian wool auction sales this week. The AWEX (Australian Wool Exchange) EMI (Eastern Market indicator) lost 19ac or 1.2 per cent this week to close selling at 1555ac clean/kg. The USD EMI fell 1.2 per cent or 13usc to close at 1057usc clean/kg.
"Volatility remains the key ingredient to market behaviour. A stable basis of trade appears to be unlikely in the current environment as fluctuations in price and demand wobble in and out week to week. The movements are becoming somewhat more predictable in direction though as volumes on offer and the Western Australian market close are flagging initial movements for the following week," the Australian Wool Innovation (AWI) Limited said in its report for the sale week 21 of the current Australian wool marketing season.
"A good mix of wool buying interests were active throughout the week, with traders, top makers, indent operators and processors all showing intent to purchase as the price drifted lower. The price retreat should indicate a weak tone but the sale room competition was perhaps some of the more widespread and normal buying patterns we have seen for some weeks," the AWI report for the week ending November 22 said.
As per the season-long trend, pass in rates climbed as prices weakened. The intentions of growers and their wool selling brokers to hold their wool, rather than to accept prices of 20 to 30ac below their pre-sale valuations is now pretty well standard operating procedure, particularly in the West. The national pass in average hit a touch over 16 per cent this week. Of most note was the figure of almost 30 per cent of the Western Australian Merino fleece failing the meet the price expectations of wool grower sellers.
Next week has another large offering of almost 40,00 bales which, if hitting the recent trend according to the volume assessment, would see the market struggle. Counteracting this though is the strong finish to selling in Fremantle which has recently flagged a market rise for the following week. Looks like a coin toss to which direction the market sails, but maybe “unchanged” could result which is a term minimally used for the past three to four months, AWI said.