Exchange rate eases wool market

Headshot of Bob Garnant
Bob GarnantCountryman
Elders' Rob Young with Angenup brothers Trevor and Rod Norrish and grandson Lachy.
Camera IconElders' Rob Young with Angenup brothers Trevor and Rod Norrish and grandson Lachy. Credit: Bob Garnant/Countryman

The Australian wool market eased 17c/kg last week under the pressure of a rising US exchange rate, a slowdown of business activity and a bigger national bale offering.

Australian Wool Industries Secretariat executive director Peter Morgan said the 44,935 bale offering incurred a 16.3 per cent pass-in rate.

"The US exchange rate finished 2.38c higher to close at 89.64c on Thursday," he said. "The eastern market indicator and the western market indicator were up on both trading days in US currency."

Dr Morgan said factors influencing the rise included the Reserve Bank holding official interest rates at their current level suggesting there would be no change in the foreseeable future.

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An Elders spokesman said holidays in China, the higher Australian dollar and large offering of mixed quality wool all conspired to produce a softer market with the EMI easing to close at 1115c/kg.

"Given the plentiful supplies of superfine wool at the moment the trade is being very selective about the wools they purchase and discounts for low strength or high mid break wools are increasing," the spokesman said.

At the Western Wool Centre last week, a 72-bale consignment of the Angenup October-shorn wool clip was offered by the Norrish family, of Kojonup.

All nine lines of the WTN/Angenup wool were of high strength and sold above 900c/kg greasy and a six-bale line of 20 microns sold to a top of 928c/kg.

Angenup Merino and Poll Merino stud co-principal Rod Norrish said a terrific growing season produced one of the better clips in many years.

"We average approximately $1740 per bale and filled an extra 40 bales, selling a total of 190 bales, averaging 19.5 micron, over two sales," he said. "It was the heaviest cutting clip in several years."

Elders technical manager Danny Burkett said Angenup's best top-making wool attracted very competitive bidding.

"The Norrish family spreads the risk by offering wool into different sales," he said.

Mr Norrish said the Angenup ewe flock was well-nourished and the lamb market was looking exceptional with the huge shortage taking place in the Eastern States.

"We are very optimistic about the sheep market," he said.

The Norrish family will be showing their stud sheep at the upcoming Wagin Woolorama.

Mr Norrish said his family was planning to enter their first team of Poll Merinos into the _Countryman _ pairs competition.

"Woolorama is an excellent showcase for the industry and also gives breeders a chance to compare notes with other breeders," he said.

An Elders spokesman said the company was optimistic about the wool market.

"With most of Asia closed for the Lunar New Year celebrations, indent orders were a little sparse but they are expected to increase again in coming weeks," the spokesman said. "The economic situation globally still presents some challenges with US data mostly positive as consumption continues to grow.

"The Euro zone is staggering towards a recovery but there is still growing nervousness about China and other emerging markets.

"China is obviously extremely important not only to the wool market but to Australia's economy as a whole."

The spokesman said what is needed is for the Chinese Government to make quick and decisive changes to its austerity program, upon its return to work, to keep the GDP growth at the forecast of 7.5 per cent

"A boost to the confidence of the Chinese consumer is definitely required at present if that country is to progress along the path to a consumption-based economy," he said.

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