On the other hand, the carding sector is continuing to enjoy good times and prices continued upwards under strong demand, during the week, the Australian Wool Innovation’s weekly report ‘Wool Market’ said.
The Australian wool exchange (AWEX) eastern market indicator (EMI) barely moved and concluded the series of sales during the week at 1522ac/ clean kg or 3ac lower.
Those buying in US dollars were the major beneficiaries of the week’s activity with the USD EMI 2 per cent lower at 1189usc/clean kg. This reduction was due almost entirely to the USD v AUD forex (foreign exchange) rates being favourably lowered by 1.9 per cent week-on-week. “Rather than the AUD being weak, it was the strength of the USD against the AUD and most other major currencies that produced the significant change,” the report said.
“The wool buyer’s approach to the week could be described as cautious as most exporters appear to be operating to careful price sensitive strategies. Under this purchase method, it is more the price of inventory intake, rather than volume that is the priority.
“Sentiment remains positive and new business is seemingly available in adequate volume to maintain the current market, but the risk appetite profile of exporters to take on forward sales without coverage is low. As the industry finances are being stretched, risk taking takes a back seat, as many trading participants predominantly focus on and service their major client’s immediate needs. The aim is to turn sales over safely, even at perceptively low profit margins,” the report added.
Merino fleece types within the 20 micron and finer area gained a general 20ac/clean kg for the week, whilst conversely 21 micron and broader fell away by 15 to 20ac/clean kg. Skirtings followed the pattern of their merino fleece counterparts and the merino carding sector continues to strengthen daily and by week’s end a decent 25 to 30ac was added to their values. Crossbred types and descriptions struggled to maintain their level for 28 micron and finer, but wools broader than 28 micron fell by 15 to 20ac.
Around 40,500 bales are scheduled to be offered in Australia this week, considered the last week which allows fulfilment of September shipment commitments. “Some minor instability may occur as buyers fill outstanding orders and then reassess their forward positions,” the report forecasts. (RKS)
Fine merino in demand at Australian wool auctions
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