Quiet market marks time

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Bob GarnantCountryman
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The Australian wool market lost 0.2 per cent last week when the Eastern Market Indicator finished at 1210c/kg clean.

Elders national wool manager Andrew Dennis said the wool market did little more than mark time - "not necessarily a bad outcome at these levels".

"The majority of micron indicators are holding in their ranges at present and until a stimulus appears on either side of the fence the status quo will remain.

"Pundits from around the world are still worried about the low volume of orders coming from higher up the pipeline but as yet there doesn't appear to be a large build-up of stock.

"Some wool top stock is building, however it has not reached the point of forced sales yet - if topmakers are able to keep clearing enough volume to keep cash flow moving, greasy purchasing will continue.

"But if the cash pressure builds, topmakers will be forced to dump stock and trigger a price down-trend as they fight each other to secure sales."

Mr Dennis said that while the volume of orders in Europe and Asia was low enough to be of concern; some orders were being pulled forward and taken in early.

"For example, June delivery orders are being taken in now, which is in theory creating a hole in June which needs to be filled," he said.

The general consensus at the moment was for the current level to hold for the next month or so but the outlook for spring was becoming less favourable.

Last week's sale of 38,103 bales on offer was much smaller than the 55,594 bales the previous week.

Australian Wool Industries Secretariat's Peter Morgan said estimates of 40,260 and 42,300 were rostered for sale this week and next.

"The three-sale period represents an increase of 2.9 per cent over the same period compared to last year," Dr Morgan said.

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