Buyer enthusiasm continues despite larger offering

Big offering doesn't dampen buyer eagerness

Wool
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Larger offerings fail to dampen buyer enthusiasm in Australian wool market.

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Although the Eastern Market Indicator dropped slightly this week, most of the Merino fleeces attracted positive price movements as buyer enthusiasm continues despite another large offering.

In fact, it was the crossbred prices which played a big part in dragged the EMI down, which ended at the week at 1275 cents per kilogram, clean, dropping 10c or 0.8 per cent.

The Western region, which does not have any crossbred components in the make up of its indicator, recorded overall positive movements for the series finishing at 1314c/kg.

In Melbourne 26 micron dropped 65c, 28 micron dropped 32c and 30 micron lost 31c.

It was the fine wools that led the way again as strong demand for the lower micron continues with 19.5 micron and finer adding between two and 45c for the week.

According to NSW Nutrien Ag Solutions south-east wool broker David Hart, the market is acting in a somewhat Irish manner, as the larger offerings seem to stimulate business and transactions.

"We are seeing a bit of a different trend where the bigger quantities don't seem to be scaring the Chinese away," Mr Hart said.

"Back when the market was much tighter when a large offering was announced, the Chinese would pull the hatches down and wait for the market to fall, then come back in.

"But at the moment it seems when a large offering is announced, that's not happening.

"The local buyers are quite happy to see the larger offering because it gives them the confidence to go out and do the business knowing that the wool is there to buy."

This week AWEX reported that 49,810 bales were offered, the second largest offering of the season to date, with just 5.7pc withdrawn and 12.6pc passed-in, resulting in 43,531 bales sold.

This resulted in another weekly lift in sales, up 2607 on last week.

This is well above the average clearance season to date of 30,089, and 12,200 bales more than the corresponding week last year.

According to the Australian Wool Innovation wool market report, although it is still very much the Chinese market that is providing the backbone to the Australian wool price, the market appears to be moving towards more of the 'normal' pre-pandemic economy levels and their associated expected patterns.

Italian buyers are very apparent as the quality of wool suitable for their high-end needs became available.

Next week's national offering is fairly similar with 48,977 bales on offer.

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