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Wool market finishes 2% lower

12
Oct '09
The Australian wool market finished 2.0% lower, on average, at sales in Sydney, Melbourne and Fremantle this week when the US exchange rate rose by a further 2.7%. The rise in the exchange rate was principally due to the increase of 0.25% in official interest rates on Tuesday and the announcement of better than expected employment data.

The AWEX EMI fell by 11¢ on Wednesday and by 17¢ on Thursday, ending the week down by 28¢ (-3.2%) to 848¢/kg. This reflected falls of 26¢ (-2.9%) in the North and 29¢ (-3.4%) in the South, with their corresponding Regional Indicators finishing the week at 874¢ and 827¢ clean, respectively. The Western Indicator rose by 3¢ (+0.3%), finishing the week at 867¢. Note, when comparing the changes in the East and the West, the EMI was up by 8¢ from Wednesday to Wednesday.

45,392 bales were on offer, compared with 45,780 bales last week, of which 14.1% were passed in, comprised of 8.5% in Sydney, 18.9% in Melbourne and 13.4% in Fremantle. Pass-in rates for Merino fleece and skirtings were 18.9% and 6.0%, respectively.1,296 bales (2.8%) from the expected offering of 46,688 bales were withdrawn prior to sale and re-offered bales made up 7.2% of the final offering. 39,012 bales were cleared to the trade.

The New Zealand Merino Company also offered 2,605 bales in Melbourne on Tuesday of which 6.6% were passed in.52 bales (2.0%) were withdrawn prior to sale and 4.0% of the bales were re-offers.

The US exchange rate (source RBA) was 0.59¢ higher on Tuesday when compared with Thursday of last week (Monday was a Bank Holiday). It was then up by 0.56¢ on Wednesday and by 1.12¢ on Thursday to close at 90.16¢, up 2.27¢(+2.6%) since the last sale. The exchange rate against the Euro rose by 0.70 Euro cents(+1.2%) to close at 61.09 Euro cents on Thursday night. When looked at in other currencies, the AWEX EMI moved down by 5¢(-0.6%) in US terms and by 11¢( 2.1%) in Euro terms when compared with the previous sale.

It was a mixed market this week with a slightly uneasy start on Wednesday, followed by a strengthening as the day proceeded. The market moved to a lower level on Thursday as buyers for China were less aggressive in their bidding.Falls were seen across all micron ranges, but were greater among fleece wools than non-fleece types. Although the price falls are large in Australian currency, this does not reflect completely what was happening in the market which saw the EMI in US currency unchanged on Wednesday and down by 5¢ on Thursday. (see also the lift in South Africa).

Changes in the Average AWEX Micron Price Guides (MPGs) for Merino wools varied from -4.6% (16.5 and 21.0 microns) to -2.8% (23.0 microns) with the downward movements marginally greater among the fine wools. Average MPGs were down by 59¢ clean for 16.5 microns, by 45¢ for 17.0 microns, by 41¢ for 17.5 microns, by 40¢ for 18.0 microns, by 39¢ for 18.5 microns, by 39¢ for 19.0 microns and by 34¢ for 19.5 microns. The 20.0 micron wool average MPG was down by 35¢ clean, 21.0 microns by 40¢, 22.0 microns by 30¢, 23.0 microns by 23¢, and 24.0 microns by 24¢.


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