Australian wool prices surge as confidence builds due to Christmas

The Eastern Market Indicator (EMI) appreciated 14ac or 1 per cent to close at 1360ac/clean kg. The Western Market Indicator (WMI) moved similarly into positive territory to 1417ac/clean kg, a 13ac gain. A very good clearance rate of 93.3 per cent was achieved nationally, as grower sellers mostly accepted the spot prices on offer.

The Australian dollar (AUD) is basically considered a commodity currency and all of those type of traded currencies have been in decline this year against the US Dollar. This past week was no exception with the AUD falling by nearly 2 per cent at one stage early in the week only to recover strongly to just 0.5 per cent lower week on week. Despite that weaker forex, the USD EMI actually gained 5ac for the week to 970usc/clean kg, indicative of the stronger demand that was on display, the Australian Wool Innovation Limited (AWI) said in its commentary for sale week 23 of the current wool marketing season.

“Pre-sale thoughts from the trade pointed to a stronger market, but this was mainly on the back of the weaker AUD making wool cheaper in USD. Overseas buyers were looking to lock in some quantity for future delivery as most pre–Chinese New Year deliveries have been made. Some pockets of new business were available, but once again at very price sensitive levels. The inability to ship prompt prevented exporters taking on too much forward volume or risk, and any fresh purchases locally would be held at their cost for an additional two/three weeks for both storage and interest,” the AWI commentary added.

China’s first stage manufacturers were again at the forefront of buying, but Australia’s largest trader showed a more willing purchasing intent and applied much stronger competition to the market, particularly on the final day of selling. European top making interest was apparent on many types but purchasing was most evident on the crossbred wools. The odd sub-continent order was operational but more-so towards the better specified lots.

Merino fleece and skirtings finer than 18.5 micron cornered the best of price gains within that sector, with individual lots of better measurements 50 to 100ac dearer on the final day as buyers scrambled for the few lots on offer. Prices were generally 40ac dearer for the week. 18.5 to 20 micron were 15ac dearer with broader types 5ac dearer. Cardings gained 10 to 15ac, whilst crossbred wools were 25 to 30ac dearer, as per the AWI.

Next week has 42,000 bales being offered on Tuesday and Wednesday.

Fibre2Fashion News Desk (KD)