Wool market holds steady under larger offering

Wool market handles larger offering

Sheep
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Steady she goes for wool market as demand continues, in particular from China.

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Despite the increase in the number of bales offered nationally, the Australian wool market showed composure this week with minimal price movements in most sectors.

The AWEX eastern market indicator fell by 13 cents for the series, closing the week at 1306 cents per kilogram, clean, a marginal one per cent decrease.

Since the COVID-induced low point of September 2020, the EMI has bounced back 52.4pc from the bottom of 857c/kg.

In US dollar terms that recovery has been even greater due to the strengthening Australian dollar.

On both Tuesday and Wednesday Sydney experienced a drift lower due to weaker demand for finer types, albeit some well-measured stylish superfine types experiencing a rise of up to 10 cents.

A three-day sale in Melbourne saw buyers chase 'Non Mulesed' and 'Ceased Mulesed' lots on Tuesday with premiums for these lots underpinning Merino fleece prices.

Yield and vegetable matter levels dictated prices on Wednesday, although broader lots above 19-micron were less affected.

Premiums for low VM lots were evident on Thursday.

In Fremantle there were mixed results in the Merino fleeces with the 19 to 20 micron MPGs in favour of up to 6c.

The sector strengthened on Wednesday as high early pass in rates of 30pc reduced the available offering.

The national offering increased by 2213 bales to 49,771 with the national pass-in rate down 3.3pc to 12pc.

AWEX reported that the value of the wool sold was $66.1 million ($1,509 per bale), taking the season total to $1.809 billion ($1,380 per bale).

The number of bales sold at auction this season is now 19pc greater than in 2019/20 due a combination of larger offerings and a higher clearance rate.

AWEX market information manager Lionel Plunkett said the larger offering attracted strong support.

"Support came from a good spread of exporters, resulting in similar prices being achieved to those of the previous series," Mr Plunkett said.

"Worth mentioning this series, there were 10 lots assessed as 1PP.

"1PP is the highest type available to wool grown in Australia. The approval criteria for 1PP certification is stringent and is carried out by a regional 1PP certification panel."

Mr Plunkett said the panel of five is made up of industry participants with exceptional knowledge and experience in the area of superfine wools.

"The last time 10 1PP lots were certified in one week, was back in October 2013," he said.

"The highest price this week however, was not achieved by one of these specialty lines.

"This was instead achieved by a line of 12.8-micron wool. The 4900c/kg greasy wool was the highest price of the current season."

It is worth noting, it's Chinese interests that continue to apply demand on the market with Chinese top-makers, processors and traders all active.

Limited competition came from Italy for a few better superfine types and some stronger European top-maker purchasing was also evident.

The crossbred sector continued to track downwards, 20 to 40c lower for the week. In percentage terms these are the largest falls for the second week in a row.

The broader microns were most affected, this was reflected in the micron price guides for 28 to 32-micron, which dropped between 22 and 40c.

Merino skirtings tended to maintain last week's level, although the oddment sector drifted lower.

Next week's national offering decreases with 45,929 bales on offer in Sydney, Melbourne and Fremantle, with only two selling days required.

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