Australian wool market up this week with high demand in India & Europe

14 Sep '23

3 min read

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Insights

Australian wool auctions witnessed a surge in prices this week with heightened demand from European and sub-continent users, including India.
A remarkable 95.5 per cent of the wool on offer was sold, suggesting wool values are currently very enticing to growers.
The steady increase in prices reflected sustained demand rather than a sudden spike.

In a week that stood relatively untouched by forex fluctuations, the Australian wool market saw a pronounced upward trend in wool prices, with every type and description of wool selling at a premium in the recent auctions. The driving forces behind this surge were renewed orders from European and sub-continent users, including a significant interest from India, pushing a competitive spirit in the sale rooms, much to the advantage of the sellers.

As buyers from different parts of the world congregated, albeit in small volumes, the pressure mounted on Chinese suppliers to up their buy-in levels to meet their regular weekly requirements. This competitive scenario paved the way for an outstanding 95.5 per cent sales figure, marking one of the highest weekly clearance rates in recent times. Such a high clearance rate echoes the prevailing trend of sellers readily accepting the bids from buyers. The season, on the whole, has observed a robust 90.5 per cent of all offered wool finding buyers, underscoring the current attractiveness of wool values compared to other on-farm production enterprises, the Australian Wool Innovation Limited (AWI) said in its commentary for sale week 11 of the ongoing Australian wool marketing season.

While the demand was promptly met and the export order books were briskly filled, it was observed that the gains were reasonably absorbed. The general sentiment in the trading floors was not of a surging demand but was more about buying to set prices, a strategic move that saw an addition of a general 1.6 per cent to the raw wool values.

The market dynamics witnessed local trading houses taking a front seat in the purchasing action, supported staunchly by strong Chinese indents in both the merino and crossbred wool sectors. The usually dominant direct buying from the three largest Chinese top makers remained notably subdued, adding to the diversified buying landscape. When placed against the same period last season, the market has seen an uplift with an additional 3.4 per cent wool sold through auctions, translating to over 10,000 bales, the AWI commentary added.

Drilling down into the specifics of the merino wool sector, the spotlight was on types broader than 18-micron, leaving the super fine categories (less than 18-micron) grappling to find the necessary stimulus to maintain their usual premiums. The crossbred wool types, on the other hand, garnered more attention, undergoing a mini-recovery, with 28-mic and 30-micron strands finding themselves 13.5 per cent and 21 per cent dearer compared to the season's onset prices, respectively.

Looking forward, approximately 40,000 bales are slated for sale in the coming week, spread over a Tuesday and Wednesday roster.

Fibre2Fashion News Desk (KD)

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