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Australian Wool Exchange EMI gains 1.2% this week

Nov '19
Pic: Shutterstock
Pic: Shutterstock
Australian auction sales produced dearer results this week across the majority of wools on offer. The AWEX (Australian Wool Exchange) EMI (Eastern market indicator) gained 19ac or 1.2 per cent this week to close selling at 1574ac clean/kg. However, a weaker AUD (Australian dollar) against the US dollar eliminated almost entirely the impact of the AUD gains.
The USD EMI gained just 2usc or 0.2 per cent to close at 1070usc clean/kg with an unchanged result the net effect for those overseas manufacturers using USD for buying on an indicator only assessment. Isolating the merino fleece types though, there was a general 1.2 per cent appreciation in the USD values.
During the sales week 20 of the current wool marketing season, merino fleece of all qualities were the recipient of the largest of rises. Gains of 30 to 40ac were commonplace in a very competitive environment which had the main Australian trading houses leading the buyers lists. Chinese indent buyers and a few of the top makers gave strong support but their purchasing activity dropped off on the final day somewhat as the first day saw levels rise above their reach and that of their clients ability to convert, the Australian Wool Innovation (AWI) Limited said in its weekly report.
"The oscillating wool market continues unabated. Recently we have seen the fortnightly changes reduced to weekly movements and now day-to-day appears to be becoming the norm. Since the first week of September 2019, the market has behaved in this micro cyclical manner and if you happened to be selling on the "good" week or day, 50ac differentials in clip returns could have resulted. This highlights the higher than normal passed in percentages that have featured at auctions through the first quarter of this season," the AWI's 'Wool Market' report said.
"Most of this volatility is stemming from the very short supply chain we are operating to at present with prompt demand being satisfied by hand to mouth buying and processing. Six to eight weeks from auction to shelf is now the general routine for wool products from auction sale in Australia to on shelf at retail for most of China delivery," the report added.
The upcoming three week break in sales without access to any significant volume of wool, may see some market behaviour change. Anticipating needs for deliveries post the Chinese New Year break in late January may prove advantageous. Normal patterns show that shearing slows significantly for a few weeks over the Christmas/New Year period. On top of that, volumes are already looking like being at least 10 per cent lower this season so supply factors will have a larger chance to force itself on price.
A large offering of more than 40,000 bales are set to go to auction next week.

Fibre2Fashion News Desk (RKS)

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December 2019

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