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Australian wool auction sales remain mundane this week

Jan '19
Courtesy: Pxhere
Courtesy: Pxhere
Sales at Australian wool auction were mundane this week with the Australian Wool Exchange (AWEX) Eastern Market Indicator (EMI) falling 5usc to 1370usc. But due to the weakening Australian dollar against all the major trading currencies by around 0.3 to 0.6 per cent, the EMI, when expressed in Australian dollar, gained 4ac clean/kg to close at 1927ac.

“Market results were directly opposed by wool type as the long wool merino sector remained very well sought and appreciated by a few cents generally, while all carding and crossbred descriptions failed to hit last week’s quotes and fell away in price somewhat. In general, merino types were anything from unchanged to 15ac dearer, crossbreds 10 to 30ac lower and cardings recorded a 15ac loss,” the Australian Wool Innovation Limited (AWI) said in its ‘Wool Market’ report for the sale week 30 ending January 25, 2019.

“With prices at historically high levels, the risk appetite of buyers remains very low, so speculative stock taking is practically nil. The known holding and financial cost burdens outstrip any potential profit given a gamble of an upward market movement pays off and an assured substantial loss given the opposite movement occurs,” the AWI report said.

Meanwhile, the continuing drought is increasing its impact on the quality of the wools being offered. A dearth of merino types finer than 18.5 micron is prevalent and the most unusual occurrence of large volumes of crossbred wools between 23 and 27 micron being offered. These two sectors are making up a high percentage of the total selection available across all wool. The price gap between merino qualities seems to be stable, whilst the crossbreds are continually changing daily trying to find comfortable levels of trade.

Perhaps the most consistent season-long demand has centred around the European super fine types (finer than 18.5 micron). Within this micron price range and published quotes, the values of these wools are somewhat hidden as they are both low in volume available and also so far ahead in price and specifications they are most likely excluded. Most of the wools that exhibit the best of style and strength (nkt) are still commanding price premiums of 120 to 240ac in some cases for the wool clips that meet buyers’ specifications and are of sound tensile strength.

There will be little over 40,000 bales at the auctions next week. With the market a little jittery towards the close, prices are expected to hold onto their levels so that China can go into their New Year in a positive mode, the report said. (RKS)

Fibre2Fashion News Desk – India

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