Australian wool market observes subdued prices, but positivity emerges

The 18.5 to 20.5 micron range Merino fleece types, constituting the majority of the offerings, experienced a stronger demand situation by the week’s close. Encouraging market activity was observed both in the West on Wednesday and Melbourne on Thursday, the Australian Wool Innovation Limited (AWI) said in its Commentary for sale week 46 of the ongoing Australian wool marketing season.

This increase in demand was helped significantly by the favourable forex rate against mainly the US dollar. This has boosted Australian dollar returns to growers and resulted in a 12 per cent improvement in the clearance rate, as sellers were more inclined to accept bids at current levels, the AWI commentary said.

As the wool marketing season draws to a close and quantities on offer start to diminish, buyer attention is increasingly focused on the upcoming rostered quantities. They are strategising to fulfil outstanding contracts and prepare for a period of reduced wool availability, AWI added.

“Our leading trading exporters continue to play a dominant role in sale rooms, exhibiting restraint in order not to disrupt the current trend. This approach boosts confidence among other market participants and bolsters faith in the ability of the wools on offer to be moved up the supply chain.

“A sense of cautious optimism permeates the market. More users are willing to place orders, albeit wary of unsettling the market. This ‘quiet confidence’ was also palpable at the recently concluded International Wool Textile Organization Congress in Japan,” the commentary said.

Despite the day-to-day traders being a secondary event at the conference, face-to-face interactions, which have been lacking for years due to travel restrictions, resulted in some modest but significant new business opportunities. Representatives from all international export destinations for Australian wool were present, expressing optimism for the long term, despite a focus on China’s recovery post-lockdown.

This week, there are 46,000 bales on offer, with auctions scheduled for Tuesday and Wednesday.

Fibre2Fashion News Desk (RKS)