It’s been an incredible year for wool. At the time of publishing, day one of the last sale in the wool selling calendar, week 52, the Australian Wool Exchange (AWEX) Eastern Market Indicator (EMI) closed at 2060 cents per kilogram, clean.
That’s a drop of 13c from the previous week, but one day of sales is still to come before we will know the official week 52 EMI value.
Last week was the smallest national offering in nine years with just 21,000 bales for sale. The EMI lifted 52 cents to set a new daily and week ending record high of 2073c/kg, clean.
Tight supply conditions are expected to hold the market through to the end of the season, but according to Landmark’s south east wool manager, Stephen Keys, with current high prices and cash flow constraints, the recess should bring with it some much needed breathing space.
“Previous trends have shown, when the market is on a continual rise, exporters count on the recess to literally get some money back into their pockets so they can start buying again,” Mr Keys said. “The exporters outlay a large amount of money week after week and, at these levels, often something has to give.
“Constraints are certainly an issue with people probably wanting to buy more but don’t have the cash flow at the moment to fulfill all of their needs.
“Hopefully the three week break will give some respite so when the market returns they will be in a good position to start off again.”
In previous years, sale one and two in the wool selling calendar are big offerings.
Growers tend to hold on to their wool clip to sell in the new financial year.
But this year the higher prices have shifted the trend and growers have sold when the market is hot.
The first two offerings in the new financial year are considerably smaller.
Nationally, in sale one and two, there are about 44,000 and 34,000 bales respectively, which is about 10,000 to 15,000 bales lower than we would normally see.
“Even these numbers are slightly bigger than the sales we have seen in the last few weeks,” Mr Keys said. “There is certainly not enough to drive the market back on a quantity point of view.”
The Australian wool auctions will recess from the week beginning July 16 and will return in the first week of August.