Market soars amid low supplies

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Bob GarnantCountryman

A 64-cent jump in the wool market last week on the back of the previous week's 52c rise pushed the fortnight's total to a staggering 116c/kg clean.

AWEX said it was the largest gain since January 2011.

"Typically, the market has taken another step higher after the mid-sale break which has allowed traders to amend their buying strategy and raise buying limits in order to meet the prevailing market," AWEX said.

Australian Wool Industries Secretariat executive director Peter Morgan said the 36,361-bale national offering was from a two-day sale in the east and a one-day sale in WA.

"The Eastern Market Indicator rose by 48c/kg on Tuesday and by a further 16c on Wednesday, taking it to the highest level (1128c/kg) since the second week of February this year," he said. "It is well above its value in the same week last year and at the start of the season."

Elders national wool manager Andrew Dennis said September was early for such a trend to develop and be maintained, so some volatility was to be expected.

"However there are some encouraging signs around the world at present together with relatively low supply in Australia following a dry start to 2013," he said.

"Uncertainty over the global response to the latest Middle East crisis and its impact on the US economy will no doubt keep the markets jittery."

Mr Dennis said some monetary experts were now forecasting the $A to rise towards 94c in the coming weeks due to improvements in global manufacturing, increasing global inflation, and Australia's terms of trade and bond yields.

Wool sales this week will offer 44,206 bales at the three national selling centres.

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