Sales drop due to season clip

SuppliedCountryman

Wool auction offerings for 2011-12 were down by 2.1 per cent to 1.945 million bales, according to AWEX.

Actual total numbers of bales sold fell to 1.692 million, which was down from the 1.753 million bales sold in 2010-11.

The 61,000 reduction in number of bales sold to the trade was contributed to the season's smaller clip.

Fremantle had a drop in numbers of bales sold to 290,245, down by 65,000 on the previous season.

Nationally, the top-ranking buyer was Viterra, which purchased 13.6 per cent of wool sold at auction.

However, the Canada-based trader's wool business has been sold in a take over by Agrium, the parent company of Landmark and its exporting business arm, Dalgety Wool Exports.

Details surrounding the merger of the wool business operations are yet to be disclosed.

Local companies Westcoast Wools and PJ Morris Wool were the second and third largest buyers of bales, respectfully, in WA.

Looking ahead to 2012-13, the volume of wool at auction is set to remain low, with the Australian Wool Production Forecasting Committee predicting production to have only a 1.4 per cent increase to 350mkg greasy.

In the June ABARES forecast, the Eastern Market Indicator is expected to average 1070 cents/kg clean, or a fall of 11 per cent from 2011-12.

The National Council of Wool Selling Brokers of Australia executive director Chris Wilcox said ABARES was predicting weaker raw wool demand due to reduced retail sales of wool clothing.

The combination, according to ABARES, will put downward pressures on raw wool prices.

Last week's wool sales were held only at east coast centres and the 32,526 offering moved the Eastern Market Indicator up 0.1 per cent to 1077 cents/kg clean.

This week wool sales will take place in Sydney, Melbourne and Fremantle with current offerings of 49,152 bales. Wool sales will begin after the mid-year three-week break, beginning next week.

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