Wool market makes biggest jump in 12 months

Wool gets a spring back in its step as EMI makes biggest leap in 12 months

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Australian wool market takes positive turn with three consecutive weeks of increases.

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For the third consecutive week the Australian wool market made a strong leap forward with the Eastern Market Indicator (EMI) posting its largest weekly rise in 12 months.

Prices increased across all micron price guides (MPGs) mostly in excess of 100 cents in all selling centres pushing the EMI up 99 cents to finish at 1036 cents per kilogram, clean.

For the second week in a row the western market had some of the largest price rises, 94 to 132 cents across all MPGs.

The western regional indicator gained 101c to finish at 1085c/kg clean but had a larger pass in rate than the other selling centres at 4.9pc.

In Sydney, the Australian Superfine (ASF) auction on Tuesday produced keen competition for the ASF types on offer, with demand spilling over into all MPGs. The northern regional indicator landed on 1086c/kg after climbing 93c.

In Melbourne, the southern regional indicator climbed by 102 cents to 1004c/kg, clean, with a pass in rate of just 1.8pc.

Overall, it was the finer fleece lots that were again keenly sought after attracting the majority of interest and strong buyer demand helped push prices higher from the onset of selling.

Strong demand for under 18.5 micron Merino skirtings saw prices rise by 150c with broader types up up 90c.

Crossbred wools also saw in increase, but not at the same pace as the Merino fleeces.

Oddments recorded gains which was reflected in the Merino cardings indicators (MC) which rose by an average of 61c.

The weekly AWEX market report said despite the rises of the last two weeks, the national quantity fell just over 6000 bales and year-on-year there was over 3500 bales less or 1.2pc.

What was also noticeable was the higher clearance rates with the national pass-in rate falling to 2.7pc, a reduction of 3.3pc on last week.

Next week the national offering increases to 33,239 bales with all three centres in operation over both days.

Wool pays the Covid price 

In its latest Agricultural Commodities quarterly, the Australian Government's agricultural commodity forecaster, ABARES, has slashed its forecast of wool prices for 2020/21 compared to its June forecasts.

Executive director of the National Council of Wool Selling Brokers, Chris Wilcox said the impact of the Covid-19 pandemic and restrictions has been colossal.

"These cuts to forecast prices are due to the impact of the Covid-19 pandemic and restrictions imposed around the world, and the impact on global economic growth," Mr Wilcox said

"ABARES now predicts that the EMI will average 1040c/kg for the full 2020/21 season, a 28pc drop on the 2019/20 average of 1444c/kg.

"This new forecast average for 2020/21 is much lower than ABARES predicted in June, when it forecast an average of 1210c/kg for the season."

He said in comparison, the average EMI for the 2020/21 season to the end of last week was 980c/kg, with the week ending level of 937c/kg lower than this average.

"The new ABARES forecast of 1040c/kg for the full season therefore implies that prices will improve over the rest of the season, with the implied average for the remainder of the season at 1055c/kg," Mr Wilcox said.

"Given all the uncertainties surrounding the impact of Covid-19, but also the tentative signs of improvement in some key factors including the recent modest improvement in raw wool demand from China, I think this new forecast from ABARES is about right, although some may feel it is a little optimistic."

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