The wool market is ending 2022 looking sunny again with prices rising after months of being literally dampened by wet weather setbacks in NSW and Victoria, and sluggish Chinese buying activity.
In an unexpected rally, wool's primary trade index, the Eastern Market Indicator, jumped 54 cents a kilogram to 1278c (clean) last week, and further on Tuesday.
Chinese textile mills have suddenly responded to Beijing easing its tough COVID-19 lockdown rules.
The EMI gained another 30c/kg on the first day of this week's sales, breaking 1300c/kg with a 93 per cent clearance.
Strong northern, southern and western regional trade bidding was not fazed by brokers taking full advantage of last week's optimistic price signals and bulking up the final four-day offering of the year to 50,000 bales.
Weekly selling roster numbers have typically been down around 38,000 to 40,000 bales in recent months.
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With China's COVID-related movement restrictions on shoppers and workers relaxed at the start of this month, early stage processors and clothing and textile manufacturers have shed some of their concerns about holding too much stock and worries about ports and freight network lockdowns.
"We certainly look like finishing the year on a more positive note than expected," said Sydney-based Nutrien Ag Solutions wool broker, David Hart.
After two months of cautious buying activity, which saw the market primarily propped up by European and Indian bidding, Chinese mills returned to swiftly increase their orders before the selling season's three week Christmas recess.
Pent up demand
"Until now we've seen a lot of reluctance within the Chinese market, but the prospect of shoppers finally getting out of their homes appears to have lifted confidence," Mr Hart said.
"There's quite a bit of general pent up demand, which probably should also keep the market busy when sales resume in January."
He said Chinese buyer confidence was also aided by the knowledge their current purchases would be delivered as mills ramped up after the week-long Chinese New Year holiday, around January 22.
In Sydney on Tuesday top end prices reached 80c/kg higher than last week for sought after wool types, with 18 to 21 micron lines up 40c to 60c, while southern non-mulesed prices were up by 150c/kg.
Fremantle attracted strong competition across all fleece wools as 18 to 21 micron lines lifted 40c to 50c on last week when the indicator jumped 50c to finish around 1420c/kg.
The price surge follows six months of flatlining demand for 19 micron and broader wool types, while 18 micron and finer offerings have enjoyed better, but more volatile, price trends which failed stop the EMI slipping well below its mid-year peaks around 1480c/kg.
Wool delivery surge
The past week's market uptick coincides conveniently with a surge in fresh wool deliveries to eastern Australia brokers' storage sites following months of soggy shearing disruptions and delays, particularly on NSW and Victorian farms.
Although flooding and road freight frustrations continue in western NSW, drier weather since late November has helped shearing teams get through a backlog of half shorn flocks and allowed wool producers to move bales to market.
"A lot of wool has come in during the past two weeks," said AWN sheep and wool specialist, Cassie Baile.
"After seeing weeks of delays due to rainy weather, or the extra time needed to get sheep from wet paddocks to shearing sheds, we're now under a bit of pressure to test and process a rush of bales arriving for sale."
Although shearing and road closure hot spots had varied, the wool delivery delays were not confined to inundated floodplain districts .
"Problem areas are anywhere from Bathurst to Broken Hill - where ever there has been long grass and waterlogged ground," Ms Baile said.
Labour headaches
Adding to woolgrowers challenges was a lack of shed labour, and shearing teams deliberately opting to avoid Merino flocks in favour of easier crossbred shearing jobs.
Mr Hart said shearer shortages, combined with the wet season had pushed some shearing times back two months or more, resulting in a much higher incidence of longer staple wool arriving for sale.
Flocks from Central West NSW districts such as Warren, where a 100 millimetre staple length would be typical, were delivering 120mm fleeces.
"Thankfully the trade is still accepting the longer wool, and even adjusting their processing machinery to cope with the extra length," he said.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
