Skirtings types in strong demand

31 May '10

3 min read

The Australian wool market finished 1.1% higher, on average, at sales in Sydney, Melbourne and Fremantle this week when the US exchange rate rose by 0.2%. It was a more settled week than the previous one, when the EMI in US terms and the US exchange rate both fell by almost 8%.

40,009 bales were on offer, compared with 45,159 bales last week. 7.2% were passed in, comprised of 5.3% in Sydney, 5.9% in Melbourne and 13.2% in Fremantle. Pass-in rates for Merino fleece and skirtings were 7.3% and 4.9%, respectively.

1,626 bales (3.9%) from the expected offering of 41,635 bales were withdrawn prior to sale and re-offered bales made up 12.9% of the final offering. 37,143 bales were cleared to the trade.

The financial markets were much steadier this week, although uncertainty still exists. There were small increases in the key exchange rates.

It was a good market this week with prices rising in both Australian and US currencies and the market finishing on a strong note. It is understood that significant business was done with China last Friday evening when Chinese importers took advantage of prices in US currency being at their lowest levels since September last year and the EMI in US terms was 157¢ below its peak value in mid-January. This fed into the auctions when demand was keen and prices rose on both days. Price rises occurred across all micron ranges and wool types, with the better wools continuing to be in strong demand.

Skirtings types were in strong demand, with price gains on both days, particularly among the finer types in the North. Crossbreds continued the good demand of recent weeks. Their average AWEX MPGs were either unchanged or up with rises from +1% at 26 microns to +2.2% for 30 microns. Oddments were in keen demand for the first time for some weeks, with the average AWEX Merino Cardings Price Guide up by 8¢ (+1.4%) after slipping by 96¢ (-14.4%) over the previous 8 sales.

Buyers for China were again dominant followed by buyers for India and Europe.

Sales will be held in Sydney, Melbourne and Fremantle next week, when 34,791 bales are currently rostered for sale. Present estimates for the following two sales (Weeks 50 and 51) are 26,645 and 37,800 bales, respectively; an increase of 29.7% over the three sale period when compared with last year. The large year-on-year increase in the offering is due to a very small offering of 17,206 bales in Week 51 last year.

In South African sales, the Cape Wools Indicator was down by 5.0% since last sale two weeks ago against a 4.3% depreciation of the Rand against the US Dollar and a 1.2% depreciation against the Euro. 8,743 bales were on offer.

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Australian Wool Industries Secretariat

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