'Positive vibes' felt across wool selling centres

Given the turmoil around the globe in the previous couple of weeks, one could be forgiven for expecting a bit of angst to flow through into the wool market.

However, it was all positive vibes, in a controlled manner at auctions across Australia last week.

Large topmakers, exporters and indent buyers were all active to a degree and certainly more consistently than has been the case in recent weeks.

Despite Sydney only managing to gather enough wool to have a one-day sale in what was normally considered the peak of the season or the ''spring flush'' there seemed to be just the right amount of wool available across the nation to keep everyone satisfied.

There is some concern building in the buying fraternity about the wools on hold or building of a mini grower stockpile, however, it is after all a free market.

Growers as a collective are showing that below a certain price, or when the price drops too much in a short time, their wool can be withdrawn until things settle down again.

This action by those in a cash-flow position to be able to do so has probably had a calming influence on the market.

Buyers and mills overseas have now reached the understanding that they should not be expecting another big drop in price just on their say so, because they want to restock again.

The reason they were able to clear their stocks over the past couple of weeks was an increase in demand.

Not necessarily sustained demand, to be fair - but it was demand that allowed the early stage processing fraternity to clear their greasy and wooltop.

Previously they were making noises about sitting back and waiting for the price to fall again before jumping back in to rebuild greasy inventories.

But now it seems to have dawned on this relatively small but vocal section of the trade that growers are more inclined to withdraw their wool if the market drops suddenly, so for them to hold back waiting for cheaper prices may be a fruitless strategy.

Most of the early stage processors are not naive enough to think they control the price of wool, hence some of the increased activity witnessed last week.

Demand in the Chinese market has been more evident recently, but as mentioned it could not really be considered ''sustained'' demand at this point.

A lot of processing activity has been centred around the fake fur products, which have now revolved back into the medium Merino sector from the early season crossbred only products.

There is a lot more 21 to 25-micron fleece finding its way into these interesting garment styles, but the traditional worsted fabric industry is still reasonably stagnant.

Uniform orders are a more-or-less constant stream of activity in China for those mills with the connections and aptitude to win the business, but there has been no sign of a large stimulus order at this stage.

Railway workers last month, and telecom workers this month, and so it goes on.

Should the government decide to up the ante and drop in a new request for the army or other massive numbered workforce it would no doubt be enough to cause a spike in the wool prices back to ''uncomfortable'' levels again.

Currently, worsted fabric producers are saying that their customers have mostly migrated back to 100 per cent or at least wool rich fabrics, so a sudden jump back to the February price levels would probably see the bubble burst and polyester levels cranked up again.

Some of the larger international brands are hovering around the edges of the market and processors, mostly in the knitwear and woollen sector, and topmakers, spinners and knitters are keenly waiting for the orders to be locked in.

A nice orderly staggered, one-at-a-time buying process would be the best outcome, so that the market does not spike upwards on the back of a frantic surge in short-term orders.

Unlike the fairy tale world, it will more than likely be unexpected and chaotic.

Retailers all across the globe are gearing up for November and any favourable numbers from the shop floor will quickly be transferred back along the supply chain as a request for more product.

So, whilst the wool market seems measured and controlled at present, a bit like the cotton market, the energy is being stored within and it is possible a breakout could happen in either direction, although the wool futures market is indicating an upwards direction is more plausible than one to the negative.

More signs of progress continue to be registered in the ongoing saga of the Sino-US trade war with a 'phase 1' deal edging closer.

Both sides seem to be confident that this part at least can be signed off by the respective leaders during the APEC conference in mid-November.

Whilst the details are still being worked out, it is likely that China will buy a bit of agricultural produce in exchange for dropping of a swag of American imposed tariffs.

So not exactly an earth-shattering quantity of trade resumption, but a positive move in what has become a hand-brake on global activity.

Of course, providing nothing derails the process like a vice-presidential speech or a bunch of loud-mouthed basketball players.

That coupled with a smooth path towards Brexit, or not, and some ongoing discussions around impeachment of a certain president in North America, whilst some South Americans and southern Europeans all get a bit cranky, highlight the fairy tale land of politics which seems to be rather too prevalent these days.

Luckily it is not the political elite responsible for the fortunes of the wool market, but everyday consumers who will hopefully soon begin replenishing their winter wardrobes.