Australian wool market resilient despite currency challenges

In a week marked by substantial wool offerings at Australian auctions, the wool market held its ground, showcasing resilience despite challenges. Wool prices, denominated in Australian dollars (AU$), demonstrated notable stability, albeit the underlying factor was the considerable depreciation of the  AU$ against major trading currencies.

The local value indicators reported a modest 1.4 per cent loss. When expressed in other foreign currency denominations, the market experienced a broader decline ranging from 3 per cent to 4 per cent. Notably, without the mitigating effects of foreign exchange movements, the losses could have theoretically doubled, the Australian Wool Innovation (AWI) said in its commentary for week 28 of the current wool marketing season.

The Merino fleece sector bore the brunt of the market fluctuations, witnessing substantial losses. In a stark contrast to the previous week, the most significant declines were observed in the 18 micron and finer super fine and ultra-fine Merino fleece wools, with losses ranging between 40 to 70 Australian cents. The mid-micron Merino fleece, ranging from 18.5 to 21 microns, also faced losses ranging from 20 to 30 cents. Skirtings remained resilient, maintaining strong competition and selling firm. Crossbred and carding types defied the general market trend, selling very firm to 10 cents dearer.

Despite the downward pressure on bid prices, wool growers, committed to selling their clips, contributed to a relatively low passed-in rate of 7.9 per cent. Most of the passed-in wool belonged to the Merino fleece sector, observed in both the Melbourne and Fremantle auction centres, AWI commentary added.

China's influence on the wool market was evident, with two of its largest top makers prominently featured at the forefront of buyers' lists for combing types. Australia's largest exporter also provided robust support, contributing to the market's overall stability.

Looking ahead, the next auction week is expected to be shorter, spanning only two days (Tuesday/Wednesday), but with a substantial offering of almost 42,000 bales.

Fibre2Fashion News Desk (HU)