EMI hits lowest point in five years

Small offering doesn't ease price plummet

News
The EMI is now at its lowest point since 2015.

The EMI is now at its lowest point since 2015.

Aa

Wool market continues to fall with EMI at lowest point since 2015.

Aa

Australia's wool market has fallen to a five year low despite another limited quantity last week with just 15,800 bales on offer.

After plummeting another 32 cents the Eastern Market Indicator (EMI) is now at its lowest point since 2015, landing at 1139 cents per kilogram, clean.

It is 627c lower than the corresponding June sale last year when the EMI was at 1766c/kg.

The big drop was despite buyers continuing to compete and pay premiums for the limited higher yielding lines.

AWEX market information manager, Lionel Plunkett, said the price reductions were driven by continual discounting of lower yielding wools.

"Buyers struggled to average the lower yielding wools into their purchases," Mr Plunkett said.

"In contract to this, the limited offering of higher yielding wools were highly sought after and the least affected by the falling market."

But it didn't stop the individual micron guides (MPGs) in the eastern markets falling by 11 to 17c, but 18 micron and coarser were the most affected.

Crossbreds also recorded significant falls with MPGs dropping by 18 to 24c.

According to Nutrien Ag Solutions southern NSW wool manager, Craig Lawson, the present EMI is not a true reflection of what is currently happening in the market.

"Because there is not enough quantity of the better wools, the market is being quoted negative, but in fact the better wools are above those quotes," Mr Lawson said.

Because there is not enough quantity of the better wools, the market is being quoted negative, but in fact the better wools are above those quotes - Craig Lawson, Nutrien Ag Solutions southern NSW wool manager

"I don't think the market was as cheap as quoted in this week's report. Not for the wool in the north anyway.

"The market is only just there, but the better, higher yielding wools are above the average.

"The weight of bad yielders, low newtons, and high mid-breaks - all those types of wools are still greater than the better ones and that is what is keeping the market reported as negative."

He said the better yielding lines were "significantly" better than those yielding under 60 per cent.

But just how long will it be until buyers will see more high yielding types of wool enter the market?

Not soon enough according to Mr Lawson.

"There are glimpses of the higher yielding fleeces coming into the market now, especially from the south eastern area, but there are still not enough," he said.

"I would estimate, at the moment, the yields are five to even seven per cent better then where they were two to three months ago.

"Around Boorowa and Cootamundra they weren't even yielding 60pc, now they are in the mid 60's.

"Wool from western and far western areas, their yields are getting better, but they aren't going to be where the south eastern wools are."

He said once wool starts entering the market from spring shearings he expects yields to get closer to 70pc, but doubts there will be wools yielding 74 to 75pc.

"The Goulburn catalogues are probably the best that we have got, certainly in the northern region," he said.

"There is a sprinkling of high yielding wools there which will keep the buyers fairly interested."

Contributing to the low number of bales offered this week was Fremantle not being in the mix with only the two eastern selling centres operating.

This week's sale, the last of the 2019/20 selling season, currently has 30,240 bales rostered for sale with all three selling centres operating.

Aa

From the front page

Sponsored by