Australian wool market sees minor price decline this week

The market's momentum was tempered by a stronger Australian dollar, which surpassed 0.66, eclipsing last week's rates during the selling period. This follows last week's favourable foreign exchange movements for sellers, the Australian Wool Innovation (AWI) said in its commentary for week 30 of the current wool marketing season.

China, the primary importer and buyer of Australian wool, is currently exhibiting subdued demand, especially in the weaving sector. Despite this, a cold spell in China during December 2023 led to a significant surge in sweater (knitwear) sales at retail, with larger-than-usual sales figures reported.

In the Merino sector, wools ranging from 18.5 to 19.5 micron saw prices drop by around 25ac. The finest Merino wools, finer than 17 micron, experienced a 60ac decline in prices, reflecting sporadic European activity and adjustments by other markets to the availability of these superior types.

Wools broader than 20 micron, which represent a decreasing portion of the Australian Merino clip, remained relatively stable, with only a 5/10ac reduction. Fine and medium wools between 20.6 to 23.5 micron make up a mere 12 per cent of the tested wools for the first half of the 2023-24 season, AWI commentary added.

The passed-in rates at auctions approached 10 per cent, indicating a growing trend among growers to retain part of their clip as prices fall, particularly in the case of Merino fleece in Melbourne (11.6 per cent passed in) and Fremantle (21 per cent passed in). Notably, two of China's largest top makers were prominent among the buyers, with significant support from trader exporters.

The upcoming week will see a shorter auction schedule of just two days, Tuesday and Wednesday, with around 36,000 bales set to be offered.

Fibre2Fashion News Desk (KD)