Market soft on global uncertainty

Bob GarnantCountryman
The West logo

The wool market finished one per cent lower last week as demand continued to remain soft because of unsettled global financial markets.

Australian Wool Industries Secretariat's Peter Morgan said some of the season's leading buyers were quieter than usual at Wednesday's start but were more active on Thursday.

"This was especially evident in WA when the Western Market Indicator rose by 9c on Thursday," Dr Morgan said.

Looking at the market in US terms, Dr Morgan said the Eastern Market Indicator (EMI) eased by 38c/kg on Wednesday but was settled on Thursday when it moved down by an additional 1c/kg.

"Global financial markets were unsettled last week," he said.

Dr Morgan said that the recent elections in Greece had left an uncertain outcome which had resulted in investors funds seeking safe havens such as US Treasury bonds, the Swiss franc and the yen, resulting in lower Australian exchange rates.

"From a broader perspective, the market remains at high levels, particularly in US currency, where the EMI is the equivalent of US1167c/kg," he said.

The EMI in $A terms closed at 1155, 168c less than in the same week last year.

AWEX said the small 33,168-bale offering had buyers searching for the best types.

"Merino fleece displaying low Newtons per kilotex with high mid-breaks were discounted across the week, as were fleeces carrying higher than one per cent vegetable matter content," AWEX said.

"The broader Merinos have weathered the decreases with the best results, in some cases bringing prices exceeding the finer wool."

Sales this week have 40,955 bales rostered followed by 36,940 and 39,800 over the following two weeks.

Dr Morgan said that the total three-week quantity represented an increase of 11.8 per cent over the same three-sale period last year.

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails