New selling season for Australian wool begins with sluggish demand

“The mid micron (27 to 30 micron) crossbred wools did fall, but very minimally at just 5ac for the week. Most of the cardings and oddment types were 10ac cheaper in the east but largely held their average values in the west, the Australian Wool Innovation (AWI) said in its commentary on sale week 1 of the current wool marketing season.

“The abnormally large supply clashed with sluggish demand. Buyers subsequently took full advantage of that situation and prices across all Merino fleece types stepped down by 40 to 60ac clean/kg as sellers generally showed little intent to protect the established levels, evidenced by the relatively light passed in rate of 14.8 per cent,” the AWI commentary said.

This week, Australia’s largest trading house stepped up and exercised its considerable buying strength to compete heavily and dominate the two largest players of the Chinese top making sector. The Australian company topped purchasing in three of the four wool type sectors. Within the Merino fleece lines alone the company purchased over 20 per cent of the offering which was over 5,000 bales for the week and upwards of a total of 8,000 bales went into its inventory, roughly estimated at over a $15 million spend.

The two big Chinese top makers also found the cheaper buy-in levels attractive and showed consistent buying interest by keenly following the market down throughout the week. “As the week progressed, other Australian traders started to cautiously buy, but the usual participation from indent buyers remained quiet in percentage buying terms,” AWI said.

Putting the current price in perspective, for overseas based manufacturers and traders using US dollars, the average price of wool (USD EMI) is currently the cheapest it has been for 18 months. The previous low was in January 2021 when the price of 934usc clean/kg was available to buyers, when COVID-reduced pricing and consumer buying at retail hit a low point.

Over 61,000 bales would be on offer over three days next week, which would be the largest sale week scheduled for quite a few years. There will be a three-week recess for wool auctions from mid-July.

Fibre2Fashion News Desk (RKS)