Australian wool markets sees first increase, 14 cents, for first time in four consecutive weeks

The Australian wool industry is breathing a sigh of relief as the wool market makes its first meaningful recovery after four consecutive weeks of declines.

Wool industry experts say the result — owing to the stabilisation of the Australian currency, an increase in consumer confidence and an increase in woollen top sales — is indicative of future market trends.

The Eastern Market Indicator added 14 cents to close at 1203¢/kg on April 22.

Australian Wool Exchange senior market analyst Lionell Plunkett said the national offering was the smallest it’s been since 2020 at 26,897 bales.

With Fremantle not in operation, bales were down 3762 on the week prior.

Mr Plunkett said the smaller offering this week attracted good widespread competition, pushing prices higher from the outset.

“Although the strongest demand continued to be on the higher yielding lots, particularly those possessing favourable additional measurement (AM) results, with such a limited selection of these types, the lesser style types and wool with less favourable (AM) results also benefited from the rising market,” he said.

“On the opening day, all the published individual AWEX Micron Price Guides across all three centres posted upward results.

“The Merino fleece MPGs added between 5 and 54 cents.

“The crossbred and skirting markets both trended higher.”

Mr Plunkett said the benchmark EMI added 10 cents for the day — the biggest daily rise in nine selling days.

“The EMI also managed a US2¢ increase,” he said.

“This was the first time the EMI rose in both Australian (AUD) and US currency terms since the 19th of March.”

On the second day, AWEX said the market again trended higher.

“The EMI rose again in both AUD and US terms, adding 4 and 3 cents respectively.

“The EMI finished the series 14 cents higher, closing at 1203¢/kg clean.”

Although most wool types experienced a rise, the Merino carding indicator was the only anomaly with a 28¢/kg drop in Melbourne.

Westcoast Wool and Livestock regional wool manager Brad Faithfull said he was confident the wool market had found its base level and would continue a positive trend.

He said a major indicator in the trend was the increase in woollen top sales, which was “always a good sign”.

Demand from trader buyers forced price rises into the local sale rooms as trading exporters quite often had to outbid the top makers and indents to meet their shipment obligations.

“We have also seen our currency — which has been radical for a while — stabilise and an increase in producer confidence,” Mr Faithfull said.

“Greasy stock is down at an international level which is also boosting demand.”

Around 28,000 bales are being offered on April 29, with the WA centre at Fremantle selling just one day again on Tuesday.