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All wools strong & dear at Australian wool auctions

12
Jul '19
Pic: Shutterstock
Pic: Shutterstock
All wools on offer finished strongly and dearer as Australian wool auction sales drew to a close for the first half of the 2019 calendar year. The much-needed confidence to keep the market busting in a positive direction was injected by some fresh forward sales for relatively prompt shipment from mainly China, and a modicum from other destinations.

The Australian Wool Exchange (AWEX) Eastern Market Indicator (EMI) gained 31ac or 1.8 per cent in the week prior to the annual three-week Winter recess in sales. The EMI for the first half of the year closed at 1754ac clean/kg. In USD terms the results were perhaps less impressive but still indicative of a slightly better demand scenario by shifting 11usc or 0.9 per cent higher to 1223usc clean/kg. The market was also assisted by the USD v AUD foreign exchange improving the AUD price by moving down 0.9 per cent week on week.

“By following the market movements of the past weeks, it can be ascertained that the global supply of wool in front of machines is dangerously low. Almost all business said to have been written was for prompt or immediate shipments,” Australian Wool Innovation said in its ‘Wool Market’ report for sale week 2 of the current wool season. A rapid rise in demand is expected once consumer retail demand picks up in the northern hemisphere, particularly when tied in with the tightening supply by the lower global wool production.

During the latest auction week, the strongest buyer interest was for the finer end of the merino offering. Gains of 40 to 50ac were commonplace within the super fine (less than 18.5micron) category, with the better descriptions seeing 75ac added to their values. European interests appeared stronger in purchasing intent. However, supply concerns due to quality issues caused by drought conditions continues to play its part in this decision making, as does the relatively attractive price of these wools when compared to the previous two years or so.

The broader (more than 18.5micron) merino sector also appreciated across all descriptions but gains were restricted to a general 10 to 20ac. Crossbreds of all types were similarly 5 to 15ac dearer, but also in reality not much dearer in delivered US price levels. Cardings though did see some significant uplift in their quotes with most sale lots within this sector rising 35 to 55ac.

Supply concerns from Australia are very much reflected by the first sales of the new season. Australian auctions have produced just 60,969 bales sold compared to the 74,113 bales last season. This means that already 17.7 per cent less wool has flowed up the chain.

Post-recess, auctions will resume in the week commencing August 6. (RKS)

Fibre2Fashion News Desk – India


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