After showing weeks of resilience, the Australian wool market succumbed to an appreciating currency and softened demand from China due to severe Covid-19 induced lockdowns.
General losses of 30 to 40 cents per kilogram left the benchmark AWEX Eastern Market Indicator (EMI) at 1384c/kg, clean - 24c below the close of last series.
The Western Market Indicator (WMI) also fell in Aussie dollar terms, down 22c to finish the week at 1424c/kg.
All indicators fell in WA between 21 and 35c.
The AUD was substantially dearer against all the major currencies and the subsequent foreign exchange (forex) rates available had immediate and negative impacts upon the local auction price levels.
By the end of the series the individual Merino fleece Micron Price Guides (MPGs) across the country had reduced by between 21 and 46c and the losses were felt across the entire spectrum.
Nutrien Ag Solutions south east wool broker David Hart said the falls across all types and microns was a combination of wools with high vegetable matter (VM), continued shipping issues, rises in the US dollar and a softening in demand from China.
"It's a combination of things and then throwing in a currency that appreciated a couple of cents in the last week makes trading conditions overall, very difficult," Mr Hart said.
"Then take a little of that demand out....and it makes an average situation veer into negative territory."
According to Mr Hart, the Omicron outbreak in China has dampened the enthusiasm across the entire country.
Anecdotal reports are suggesting the Omicron variant is resistant to their domestic vaccines in China.
"What was pretty strong demand for wool has softened," Mr Hart said.
"China is going through some very sever lockdowns at the moment and when the Chinese decide to lockdown they lockdown.
"Anecdotal reports are are drivers aren't allowed to get out of their cabins of their trucks from the time they leave their departure point to when they return.
"They are also locking down entire department buildings. That is the type of degree they are going to."
Take a little of that demand out.....and it makes an average situation veer into negative territory- David Hart, south east wool broker Nutrien Ag Solutions
He said until things 'clear up', demand from China will most likely remain subdued
"They are still keeping the wheels of the economy turning, but with difficulty," he said.
Mr Hart said the selection of wool is declining, with lesser style wools are becoming more common
"VM levels are higher and the typical yield is falling at the moment, which is a seasonal thing because the wool is tending to come more from the west," he said.
Those lesser style wools, or wool carrying higher levels of VM as well as those with lower NKT results (particularly those with mid-breaks higher than 60pc), were generally 30 to 60c cheaper.
And although there was strong buyer attention on the better types, the prices being achieved were generally 10 to 20c below those achieved in the previous sale.
Passed in rates hit the highest rates for some time with just 83.9pc of all wool offered nationally cleared to the trade, confirming the trend that has appeared the past few weeks of growers holding onto their wool for a better price.
The clearance rates did improve in WA though as a 20pc passed in rate bettered the previous sale series.
About 48,000 bales have been rostered to sell this week over three days.
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