Wool market eases, but still solid

Wool market eases, but still holds firm


Wool
The eight-week rally in the wool market has finished with a dip in the EMI this week.

The eight-week rally in the wool market has finished with a dip in the EMI this week.

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Wool market eases, but prices still hold firm as one millionth bale sold for the season.

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After an eight-week rally, the stellar run for Australia's wool market has come to an end. 

It was the best start to a calendar selling year since 2006, but the AWEX eastern market indicator (EMI) closed 11 cents lower finishing at 2016c per kilogram.

In US dollar terms, the EMI experienced a similar US11c fall to US1441c/kg.

On the opening sale day, prices slid in Melbourne and Sydney selling centres, but clawed their way back to a more positive position by Thursday to see all three centres making gains. 

But prices for most wool microns, Merino wool and crossbred wool, finished lower for the week in the eastern states.

Australian Wool Innovation (AWI) trade consultant, Scott Carmody said while it is never good to see some of the wool values decreasing, the market managed to hold its own.

"Most participants reported the market as standing up strongly against expectations of a much worse fate given the general business and potential negatives impacts globally," Mr Carmody said.

"Confidence seemed to grow exponentially following an initial 20 tp 30c fall on Tuesday at the standalone Melbourne sale.

"By the end of the selling week most wools had recovered to be selling near to the previous weeks closing quotations with the WA market performing the best."

Merino wool prices in Fremantle lifted with the western market indicator (WMI) finishing 16c higher at 2177c/kg, being the highest level since September 2018.

Interestingly, the one millionth bale for the season was sold on Wednesday which was about six to seven weeks later than the previous seasons, indicating just how much volume has been reduced.

Out of the 48,948 bales that were offered for sale this week, 44,846 were cleared leaving just 8.4 per cent or 4102 bales passed in.

The turnover for the week was $99.27 million taking the season's dollar value to $2.24 billion.

Next week quantities reduce slightly with just over 46,000 bales on offer in Sydney, Melbourne and Fremantle.

According to the latest Australian Wool Testing Authority (AWTA) data on wool tests for February released today, the decline in the weight of wool tested for the month was a considerable improvement on the 12pc drop in January with the weight of wool tested down by a significantly lower 5.5pc for February. 

This has brought the year-on-year decline for the 2018/19 season to date to a decline of 11.2pc.

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