Wool falls, sellers bail

Wool falls and sellers bail, pushing pass-in rate up

Sheep
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Industry experts say it's time to take stock as EMI falls by 32c, giving into the weight of high weekly offerings.

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The Australian wool market dropped this week, taking sellers with it, with their resistance pushing the passed-in rate up across the country.

The Eastern Market Indicator closed the week 32 cents lower than the previous week landing at 1277 cents per kilogram, clean, a fall of 2.4 per cent.

The passed-in rate finished at 16.9pc by the end of the series. Compared to the previous series this was an increase of 7.6pc.

Yet wool on hold continues to bolster offerings. There were still 40,241 bales sold, continuing on this year's run of high bales sold each week.

Compared to the previous season there has been 63,349 more bales put through the auction system, this is 5.6pc more than the corresponding sale of the previous season.

The drop in US terms was a little less dramatic thanks to the continued strengthening Aussie dollar, falling 14c, to finish at US1000c.

All sectors of the market suffered losses apart from one with Merino fleece Micron Price Guides (MPGs) across the country falling between 17 and 82c.

The losses in these MPGs combined with losses in the skirting, crossbred and oddment sectors pushed the AWEX EMI down significantly.

The AWEX market report said better style wools, particularly those with good additional measurements, received strong buyer support and were least affected by the falling market.

But according to executive director of the National Council of Wool Selling Brokers Chris Wilcox it in now time to take stock on how consumer confidence is shaping up in the major wool consuming countries in the Northern Hemisphere.

"Consumer confidence in the major wool consuming countries reflects how the progress of the countries and regions are in tackling the COVID-19 pandemic," Mr Wilcox said.

"Trends in consumer confidence in Europe (which now excludes the UK), the US and the UK remain low.

"There is little sign of recovery in these regions."

In contrast, he said consumer confidence has recovered to levels seen prior to the COVID-19 pandemic in China and South Korea.

It has somewhat recovered in Japan, but remains below year earlier levels.

"Consumer confidence in all of the major wool consuming EU countries is low as those countries struggle with the start of a third wave of COVID-19 infections and new lockdown restrictions," he said.

"These weak consumer confidence levels translated into poor retail sales of clothing in many countries over the recently completed autumn/winter season in the Northern Hemisphere.

"The autumn/winter period (between October and January) is the most significant period for the sale of wool clothing each year in these countries.

"It varies between countries, but as a rule of thumb this four- month period accounts for around 60pc of the annual sales of wool clothing."

He said retail sales of clothing in the major wool consuming countries over the autumn/winter season were negative in many countries, but strongly positive in China.

This week's national offering lowers, with 46,578 bales currently on offer in Sydney, Fremantle and Melbourne.

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