Big jump in wool prices

Aussie wool prices rebounded last week.

The Australian wool market experienced its biggest weekly price jump since October 2006 last week.

The market finished 6.5 per cent higher on average after sales in Fremantle, Sydney and Melbourne.

In Fremantle, the Western Market Indicator was up 53 cents to finish the week at 746c per kilogram clean, rising by 23c on Wednesday and 30c on Thursday.

The Eastern Market Indicator lifted by 43c to close at 766c/kg clean after rises of 45c and 41c in Sydney and Melbourne respectively.

Buyers for China were dominant with support from those for India and some interest from Europe.

Australian Wool Industries Secretariat executive director Peter Morgan attributed the bigger increase in the west to the relative absence of fine wools in the Fremantle sale.

In his weekly market report, Dr Morgan said the fine wool rises had been less than those in the medium and broader Merino types last week.

He said there were several factors, particularly the fall in the US exchange rate, which could have influenced the market and caused such a big jump, which in 2006 was caused by concerns about supply due to deteriorating seasonal conditions.

"We have also seen the Bank of England's 1.5 per cent reduction in interest rates late last week and the announcement of the $855 billion Chinese financial stimulus package this week," he said.

"The latter may have stimulated confidence, but it's difficult to know.

All micron price guides were up following the sales in Fremantle, with the 19 micron category making the biggest jump of 106c, followed by a 90c jump for the 19.5 micron, 79c for the 20 micron, 65c for both 18.5 and 22 micron, 63c for 21 micron, and 50c for 23 micron.

Of the 11,800 bales originally rostered for sale in Fremantle, 8105 bales were offered, of which 6868 bales were sold.

While he welcomed the better prices, StaWool Brokers general manager Simon Rodwell expects the volatility in the market to continue into the new year.

Mr Rodwell said there was still quite a bit of wool on hold and better prices were likely to be met, with more quantity.

Sales in Sydney, Melbourne and Fremantle this week will offer 41,062 bales for sale.

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