Positive rebound sees WA emerge as wool leader
Woolgrowers have avoided another drastic hit after the greasy commodity last week rebounded from its biggest weekly percentage fall in more than 17 years to post a 14¢ gain.
The Eastern Market Indicator closed at 1301¢/kg clean last Wednesday, despite mounting concerns a lack of international wool buyers would cause its value to crumble.
WA paved a positive foundation to emerge as the leading market, with the Western Market Indicator closing 31¢ higher at 1384¢/kg following improved selling at Bibra Lake’s Western Wool Centre.
The market’s upward trajectory came in the wake of the EMI suffering a 155¢ fall the week prior amid mounting coronavirus uncertainty.
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The steep drop equated to 10.8 per cent loss — the national indicator’s biggest weekly percentage drop since May, 2003.
After last week’s 14¢ gain, Australian Wool Exchange senior market analyst Lionel Plunkett said the market improvement was pleasing with increases across merino fleece types.
“Brokers actively encouraged only genuine sellers to enter the market, resulting in 22 per cent of the offering being withdrawn prior to sale,” he said.
“This action had a twofold effect. Firstly, it reduced the overall offering, increasing demand on the lots remaining.
“Secondly, it increased buyer confidence, as they realised the wool still in the sale was more likely to be sold — the result was price increases across the country.”
Sixty-one lots were offered via the Australian wool industry’s inaugural live online open-cry auction at Sydney last Wednesday.
The online auction was conducted to determine if sales could be held remotely during the COVID-19 pandemic.
It followed Schneider Group Australia manager director Tim Marwedel last week suggesting the nation’s auctions should be suspended to avoid the coronavirus crisis depreciating wool’s value.
After last week’s market rise, Mr Marwedel noted 29,495 bales were offered to mark a 8219 reduction, or 33 per cent decline, week-on-week.
He said the reduced national offering had benefited sales.
“Brokers and growers have considered the circumstances and withdrawn wool that was not realistically for sale,” Mr Marwedel said.
“This is a very sensible approach and had a positive influence on the final market outcome.
“It also resulted in just a 12 per cent passed in rate that allowed those genuine clips that were for sale, a realistic chance.
“We thank those brokers who worked with their clients to help reduce the volume for sale during this time.”
This week’s selling was initially set to be a one-week Easter recess.
However, the National Auction Selling Committee last week decided to roster to provide another selling opportunity for the nation’s woolgrowers who are wanting to sell.
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