Wool market finishes 0.7% lower

22 Feb '10

3 min read

The Australian wool market finished 0.7% lower, on average, at sales in Sydney, Melbourne and Fremantle this week when the US exchange rate rose by 0.8%.

44,453 bales were on offer, compared with 49,584 bales last week, of which 9.6% were passed in, comprised of 8.8% in Sydney, 9.5% in Melbourne and 10.6% in Fremantle. Pass-in rates for Merino fleece and skirtings were 11.2% and 3.7%, respectively. 1,645 bales (3.6%) from the expected offering of 46,098 bales were withdrawn prior to sale and re-offered bales made up 8.4% of the final offering. 40,167 bales were cleared to the trade.

The New Zealand Merino Company also offered 3,115 bales in Melbourne on Tuesday of which 6.3% were passed in.

Exchange rates were generally stronger this week, due to a lift in confidence and an expectation of a rise in official interest rates in Australia when the Reserve Bank meets next month. The high exchange rate against the Euro continues to be influenced by concerns about financial events in Greece and possibly other Members of the EU.

It was steady week in the market, with the falls in the EMI and Micron Price Guides mostly counteracted by the rise in the US and Euro exchange rates and strong competition in the sale rooms. Prices a little easier on Thursday and the falls were least at the fine end.

It was also a generally good sale for the New Zealand Merino Company offering on Tuesday.

Demand for skirtings types was again strong on Wednesday, but a little mixed on Thursday when the lesser types lost ground and the better types picked up further on Wednesday's market. Crossbred prices came under pressure with large offerings in the South. Their average AWEX MPGs fell by 15¢ (-2.5%) for 26 microns, by 10¢ (-2.2%) for 28 microns, by 9¢ (-2.3%) for 30 microns and by 4¢ (-1.1%) for 32 microns. Oddments results were mixed on Wednesday and were generally down on Thursday. The average Merino Cardings MPG was down by 4¢ (-0.6%).

Buyers for China were again dominant, followed by buyers for Taiwan and India. There was a stronger presence from buyers for Europe where trade reports indicate stronger demand for woollen types.

Sales will be held in Newcastle, Melbourne and Fremantle next week, when 47,756 bales are currently rostered for sale. Present estimates for the following two sales (Weeks 36 and 37) are 48,150 and 43,500 bales, respectively; a decrease of 1.0% over the three sale period when compared with last year.

Sales are in recess until next week in South Africa.

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Australian Wool Industries Secretariat

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