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Buyer confidence boosts Australian wool market

May '19
Pic: Pexels
Pic: Pexels
The rise in buyer confidence with writings of new business for China resulted in price gains at the Australian wool auctions this week. The AWEX Eastern Market Indicator (EMI) appreciated by 2.95 per cent or 54ac to close at 1887ac clean/kg. The USD EMI outstripped AUD gains and moved 3.74 per cent or 48usc higher to close the week at 1308usc clean/kg.

“The ingredients of greater confidence and stronger demand were added to the Australian wool auctions this week and the results were stark, positive and immediate. The price gains that eventuated almost halved the losses of the previous three sale weeks,” the Australian Wool Innovation Limited (AWI) said in its ‘Wool Market’ report for the sale week 48 of the current season.

Price gains of up to 80ac clean per kg were commonplace within the merino sector, whilst many individual lots bearing the better specifications were over 100ac dearer, during the sale week ending May 31. All other wool types and descriptions on offer were quoted dearer to varying degrees of 15 to 50ac by the end of the week.

“The biggest change that came over the market was sentiment. Buyer confidence was buoyed by the writing of new business which was mainly into China, but smatterings of interest also appeared from across most of the global wool destinations. Exporters were said to be continuing their generally risk-adverse trading even in light of prices being put on the table that appeared ‘over the market’, which is rare indeed,” the AWI report said.

Demand for all wool types is still evident and is the key driver of wool price, but that demand has turned over the past 6 to 12 months to be being sporadic and softer than the peak demand seen in late 2017 and early 2018. The subsequent 10 per cent loss of Australia’s national clip is now assisting in the maintenance of price levels.

There will be just 23,600 bales on offer at the auctions next week. There will not be any auction at Fremantle due to low volumes preventing a feasible sale being held. (RKS)

Fibre2Fashion News Desk – India

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