Australian wool auctions turn positive this week

“Some renewed enthusiasm from China helped stage the reversal this week. Chinese manufacturing sector figures from March 2019 produced a surprising turnaround to the positive with exporting factories the major beneficiaries it appears. To add sustenance to a better trade scenario, bank lending in China is said to have loosened substantially and finance is more accessible,” the Australian Wool Innovation Limited (AWI) said in its ‘Wool Market’ report for the sale week 42 of the current marketing season.

Another leading factor as to why the prices went to the better side for grower sellers, was the higher percentage of better wools on offer, said the report for the week ending April 18.

During the week, the auction was fully supported on the Merino fleece sector by the large Chinese indent operators and top makers, with good backing from two of the larger local trader exporters. In fact, across all wool types and descriptions, the competition could be described as being widespread for the first time for a quite a while, the AWI report said.

Export data for Australian wool up till the end of February show that China has reduced its import percentage of the clip from last full season of 75 per cent down to 72 per cent. “If this figure holds till the end of this season that will represent a drop of import into China or around 4.2 per cent of our clip, but with the drop in production and lower yields, that figure will be a significant one when measured in actual clean kgs exported to China for the 2018-19 season,” the report said.

India has remained locked at 6 per cent of Australian wool export, whilst Italy’s share has increased to 6 per cent from last season’s 4 per cent, and the Czech Republic’s share dropped to 4 per cent from 5 per cent.

No auctions are scheduled next week as the Easter period does not allow enough time for the proper conduct of the sales. “We currently expect large offerings in a fortnights time followed by weeks and perhaps months of volumes available falling away,” AWI said in its report. (RKS)

Fibre2Fashion News Desk – India