Fine wool remains vigilant

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Bob GarnantThe West Australian
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The wool market continued to slide last week finishing 5c/kg lower, even with a much lighter 39,924 bale offering.

Australian Wool Industries Secretariat executive director Peter Morgan said the market was affected by subdued trading activity.

"The smallest falls in the average AWEX micron price guides were at 16.5 and 17.5 microns," he said.

"All other Merino MPGs were down by around one per cent."

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Australian Wool Innovation chairman Wal Merriman, who was at Woolorama last week, said that fine wool had remained vigilant against increased supply.

"In the past 20 years, 16.5 micron production in Australia has increased by 511 per cent," he said.

"Since 2001, the Eastern Market Indicator for fine wool has increased 11.2 per cent in US dollars.

"Three superfine processors have left the industry since the global financial collapse.

Mr Merriman said AWI continued to invest in marketing to lift the price of fine wool to Australian growers.

He said raw wool supplies were very low in the international pipeline, which, combined with colder weather in the northern hemisphere, all worked in wool's favour.

ABARES' recent forecast report said Australia's fall in wool production would, in turn, increase wool prices over the next five years with steady demand.

"The long-term outlook for wool producers appears very favourable," an ABARES spokesman said.

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