Wool market groans under weight of supply

EMI down 19c after biggest offering in 12 years

Coronavirus
SOFTER MARKET: Wool prices retreated on Thursday as buyers were confronted with the biggest weekly offering in 12 years.

SOFTER MARKET: Wool prices retreated on Thursday as buyers were confronted with the biggest weekly offering in 12 years.

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The wool prices retreated on Thursday with the biggest weekly offering since 2008.

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The wool market groaned from the impact of this week's big offering of 62,166 bales which helped push the Eastern Market Indicator down 19 cents to 1562c.

Despite the fall there is still some optimism around the market even with the ongoing threat posed by coronavirus to both the Chinese and world economies.

This week's sales were the first since February 20 when a cyber attack paralysed the industry's major IT provider, Talman, which provides system software to a large number of brokers and most buying houses.

This left a backlog of wool to clear which lifted this week's national catalogue to the largest weekly offering since 2008.

The market proved resilient on Wednesday with wool prices generally firm in the eastern selling centres although prices fell in Fremantle. The EMI surprised a few people with a 3c rise.

However, prices started to droop on Thursday on the back of extra supply and less certainty about demand.

The EMI dropped 22c with the Northern Indicator sliding by 17c to 1605c and the Southern Indicator by 24c to 1536c.

Demand was again lacklustre in Fremantle with the Western Indicator shedding 36c to 1662c.

More than 29,000 bales were offered in Melbourne over the two days of selling with 22,603 cleared to the trade with a pass-in rate of 22.9pc.

In Sydney 18,043 bales were offered with 14,825 sold and a pass-in rate of 17.8pc.

Fremantle had a high pass-in rate of 32.5pc with 9993 bales sold from a weekly offering of 14,808.

Merino fleece in Sydney on Thursday eased across the board with 18.5 micron and finer sliding by 10-20c. Broader wools ended the day 20-30c lower.

In Melbourne 18 micron and finer Merino fleece lost 10-15c while broader wools nosedived by 35c.

The Fremantle fleece market tracked sharply downward on Thursday with price cuts across all types and microns.

Wools 18 to 21 microns slipped by 50-70c while 21.5 micron and broader were generally 20-30c easier.

Almost half the fleece lines were passed in at Thursday's sale.

Meanwhile, the latest data from AWTA shows a sharp fall in the volume of wool tested in February compared with February 2019 for Australia and for each state.

Overall, the weight of wool tested in Australia fell by 10.3pc in February.

For the first eight months of this season the weight of wool tested was 5.7pc lower than for the same period in 2018-19.

NSW (the largest producing state) recorded a 12pc decline in February, as did Queensland.

There was a 14pc drop in South Australia while Victoria (the second largest state) recorded an 8pc drop. Western Australia (the third largest state) recorded a 6pc fall.

The volume of wool exports declined by 2pc in January 2020 compared with a year earlier, while the value of exports was down by 18pc.

Export volumes to China were slightly higher than in January 2019 while exports to India lifted by 35pc.

The story Wool market groans under weight of supply first appeared on Farm Online.

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