Elders expects superfine Merino premium price to hold

Headshot of Cally Dupe
Cally DupeThe West Australian
Wagin Woolarama wool head steward Howie Ward.
Camera IconWagin Woolarama wool head steward Howie Ward. Credit: Cally Dupe

Elders predicts healthy premiums for superfine Merino will continue well into next season.

The agribusiness company’s International Wool Report last week said the basis betweenJU superfine and medium wool had “probably reached its peak”.

But it also said healthy premiums would remain in place “unless the season was a disaster resulting in a huge increase in hunger fine merino”.

The Eastern Market Indicator closed 43¢ higher at 1544¢/kg and the Western Market Indicator rose 53¢ to 1560¢/kg at last week’s market.

The wool market continues to roll along in a very healthy position with medium Merino prices sitting at the top of the recent trading range.

The Elders’ report urged medium Merino growers to “take advantage and lock away some future production”.

“There will no doubt be another correction in coming weeks, followed by hopefully a recovery before the end of the season,” the report said.

“More of the same for crossbred wools at present but as time passes, the stock in the pipeline is gradually being consumed.

“We are getting closer to a more balanced situation.”

A drop in the value of local currency meant prices were able to rise on Thursday, without affecting the prices paid by buyers.

Merino fleece types gained JUbetween 50¢ and $1 last week. as buyers rushed to secure lower VM better style

The Eastern Market Indicator closed 43¢ higher in local currency terms.

“Demand has clearly been the driver in 2017 and easily accounted for the increased supply to date,” the Elders report said.

“Optimism is surrounding the new products being brought to market using merino wool in less traditional ways.

“Breaking down of some of the myths about wool’s less desirable features has helped to build and sustain these record, or near record price levels.

“Sitting back and thinking all is well is not an option however, and will definitely end in tears.

Whilst the momentum is with the industry, we do need to take steps to ensure we don’t fall backwards again.”

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