Prices ease as drought wools hit the market

Drought wools entering the market force heavier competition on better fleece lines


Wool
Better fleece lines at wool auctions are commanding all the buyer's attention as lesser style or drought wools again make their way into the market.

Better fleece lines at wool auctions are commanding all the buyer's attention as lesser style or drought wools again make their way into the market.

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Wool prices ease as drought wools enter the market.

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Better fleece lines at wool auctions are commanding all the buyer's attention as lesser style or drought wools again make their way into the market. 

Strong competition means the better wools recorded little change when it came to price this week, but for the lesser style wools, the bulk of the market, buyers struggled to average them into their purchases. 

The Australian Wool Exchange (AWEX) eastern market indicator (EMI) slid for the second consecutive week, closing at 2008 cents per kilogram, a fall of eight cents for the week with the most significant declines for Merino wool particularly seen in Melbourne and Fremantle sales. 

In US dollars (US) terms, the EMI experienced a much greater downturn and fell away by US26c to US1415c/kg on the back of a much weaker Australian dollar. 

Australian Wool Innovation (AWI) trade consultant Scott Carmody said with more drought affected wool entering the market, wool values were in conflict. 

"Merino fleece and skirtings traded to weaker levels with the deteriorating selection nominated as the primary cause," Mr Carmody said.

"Sale catalogues for Merino fleece were dominated by sale lots with very low yields, low strength, high position of break middle (PobM)  and high calculated co-efficient variation hauteur (cvh)," Mr Carmody said.

"All these readings inhibit the buyers ability to average the standards required for batch lots to effect delivery.

"Whilst the visual appraisals may not see exporters type these lots as inferior, the readings alone was enough to see the market drift on these wools and a general 45c was lost."

But he said conversely, any of the sale lots with the “good” specifications sold rock solid with barely a cent difference from week to week.

According to AWEX senior market analyst Lionel Plunkett, playing a large role in the overall fall in the individual Merino micron price guides (MPGs), which fell by 10 to 40c, was the lesser types selling 30c to 60c below prices achieved at the previous sale. 

"The drop in the MPGs was the reason behind the EMI falling," Mr Plunkett said.

"It was only the strength of the other sectors that prevented the EMI from falling further." 

The crossbreds and carding sectors enjoyed better results though and prices progressed upwards throughout the selling week.

The cardings in particular were the standout, with price gains nearing 50c.

Crossbred wools from 25 to 29 micron were 20 to 30c dearer, but noticeable was some heavy discounts appearing for wools in that category which did not meet minimum classing or preparation standards.

Next week 41,722 bales are expected to be auctioned, the result, Mr Carmody said, hinges on the quality of the selection. 

"As witnessed this week, a larger volume of better specified lots is needed in order for buyers to average correct batch specifications," Mr Carmody said. 

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