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Australian wool auctions see prices softening this week

25 Aug '23

2 min read

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Insights

The Australian wool auctions have seen a continued softening in wool prices since resuming after Winter, with merino prices losing 30 to 50ac clean/kg.
The absence of the Fremantle (WA) market and higher forward estimates did not boost prices.
Growers and sellers are more willing to accept offered prices, with 90.3 per cent of wool exchanging hands.

The Australian wool auctions continued to display a softening trend in wool prices this week, a pattern in force since sales resumed three weeks ago after the annual Winter recess. Merino prices suffered the most, losing 30 to 50ac clean/kg, while cardings drifted 5 to 10ac lower. Surprisingly, crossbred wool types managed to gain 10ac from a very low price basis.

The absence of the Fremantle (WA) market operating failed to boost prices in the two remaining Eastern centres. Any optimistic thoughts about reduced quantities affecting prices positively were quickly dismissed. Forward estimates for the upcoming weeks are scheduled well above last year's levels, despite the offered and sold quantities at auction being 11.6 per cent and 6 per cent lower, respectively, the Australian Wool Innovation Limited (AWI) said in its commentary for sale week 8 of the ongoing Australian wool marketing season.

One significant shift in this season's market is the willingness of growers and seller representatives to accept the prices being offered. Compared to the same period last year, a higher percentage of wool, 90.3 per cent of what was offered, has exchanged hands.

Chinese top makers and first-stage manufacturers have continued to dominate the buyers' lists, employing a step-down strategy due to cautious competition. This lack of confidence among traders means the new forward and prompt business is currently unable to operate at typical purchasing engagement levels, the AWI commentary added.

In currency news, the Australian dollar (AUD) showed resistance against further erosion of value against the US dollar. Although the weaker forex trend helped mitigate the extent of AUD falls in the past few weeks, this week's market remained similarly weak, without forex supporting AUD prices.

Looking ahead, a large volume of 48,600+ bales is slated to sell next week across the nation.

Fibre2Fashion News Desk (KD)

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