Chinese wool demand buoys spirits

The wool market settled in a larger sale last week when the AWEX regional indicators finished 1.2 per cent lower.

Australian Wool Industries Secretariat representative Peter Morgan said it was not unlike the pattern seen in January when the Eastern Market Indicator rose by 39c/kg and then eased over the following sales.

“The EMI remains at 56c/kg in Australian currency and 33c/kg in US currency above the closing values in December, ” he said.

Dr Morgan said the 55,518 bale offering realised 48,346 bales cleared to the trade.

AWEX said there was a wide diversity of microns, styles and specifications offered nationwide.

“Spinners style superfine fleeces were not affected by the slowing market trend, ” AWEX said.

Elders national wool manager Andrew Dennis said carding wools appeared to be driven by Chinese demand for knitwear products.

“Weavers in the worsted sector in Italy who are purchasing fine and superfine fleece types and exporting the fabric to the US and Asia appear optimistic, ” he said.

He said this situation is typical of a market lacking direction.

“The market will be trending sideways for the most part until a stimulus appears to create a more definite trend. Once the Chinese New Year celebrations are over, their new government will focus on carefully priming the economy back to a serious rate of growth.

“However, they will also be aware of the inflationary repercussions which come from printing more money, ” Mr Dennis said.

Good news for woolproducers was found in Rabobank’s upbeat assessment of the global cotton market for 2013.

The report predicts that cotton prices will lift by 17 per cent in 2013, according to National Council of Wool Selling Brokers of Australia executive director Chris Wilcox.

“As a result of increased cotton prices and lower stocks, due to higher production costs and competition for land, cotton stocks are predicted to fall to 63 per cent of world usage in 2013/14, ” he said.

“Lower volumes of cotton will boost the commodity’s prices, which will contribute to higher wool prices.”

Boyup Brook woolgrower David Turner is hoping his family’s Tone Park clip, now being shorn, will sell well in today’s market. The Turners are expecting to send 350 bales to auction in three weeks from their 6000 Merino ewe flock.

“Wool is one of the few positives in agriculture at the moment after being disappointed with receiving only $65/head out of a recent lamb consignment, ” Mr Turner said.

Relying on farm income from both cattle and sheep, Mr Turner said he was concerned for the future of the live export trade.

To help increase the wool return, the Turners are relying on Ben Brook Merino stud, of Boyup Brook, to lift wool quality.

“We select rams to increase wool cut while maintaining quality, ” Mr Turner said.

Wool sales this week are up to 50,612 bales with the next two sales at 52,400 and 45,900 respectively.