Coronavirus outbreak dents Australia’s wool market

The coronavirus has impacted international presence at Australian wool auctions, casting a cloud of doubt over big wool importers.

Australian Wool Exchange senior market analyst Lionel Plunkett attributed the epidemic to a “lack of buyer confidence”, after the Eastern Market Indicator closed 28¢ down at 1548¢/kg greasy last Thursday.

In comparison, the EMI fell 119¢/kg one week during the 2003 SARS outbreak in southern China.

Last week the market was also volatile on the back of Chinese New Year celebrations leading to the closure of some mills.

Mr Plunkett said coronavirus, which was declared a global emergency by the World Health Organisation last week, had increased uncertainty across international wool markets.

“The outbreak of the coronavirus has forced multiple countries to enforce travel restrictions, severely impacting the workforces of many overseas mills,” he said.

“This has created uncertainty among many large importers of Australian wool, which in turn has affected the buying confidence of local exporters.

“The lack of buyer confidence was immediately apparent when the markets opened on the east coast.”

Losses were less severe at Bibra Lake’s Western Wool Centre compared to the Eastern States last week, with the Western Market Indicator shedding 2¢ to close at 1548¢/kg.

The EMI recorded a 56¢ amid the coronavirus uncertainty on the opening day of selling last week to mark the biggest daily fall since August.