Volatility ‘key ingredient’ in wool price wobble
Volatility has remained the “key ingredient” in Australia’s topsy-turvy wool market, analysts say, after the greasy commodity’s value fell last week.
The Eastern Market Indicator closed at 1555¢/kg clean last Thursday to notch a 19¢/kg decrease in Australian currency and 13¢/kg lower in US currency on the previous week.
In WA, the Western Market Indicator dropped 22¢ to finish at 1655¢/kg clean. Elders WA north wool sales manager Tim Burgess said Chinese buyers were bidding on specific types at price levels, which met their requirements, at the Fremantle auction.
The better types sold very well, which was represented by a one bale consignment of 15.6 micron wool offered by Boyup Brook woolgrower Shannon Dalton.
Although the wool market value fell, Australian Wool Innovation trade consultant Scott Carmody said processors had shown intent to buy.
“Volatility remains the key ingredient to market behaviour,” he said. “A stable basis of trade appears to be unlikely in the current environment as fluctuations in price and demand wobble in and out week-to-week.
“The movements are becoming somewhat more predictable in direction, though, as volumes on offer and the WA market close are flagging initial movements for the following week.”
The 35,719 bale national auction realised a 15.4 per cent passed-in rate, after 5.7 per cent of the potential offering was withdrawn prior to sale. Australian Wool Exchange senior market analyst Lionel Plunkett reported the value of the wool sold was $50.7 million, equating to $1677 per bale.
Mr Plunkett said the result lifted the season total to $819 million or $1742 per bale.
“The number of bales sold at auction this season is now 19.3 per cent less than in 2018-19,” he said.
“The wool market has been unable to maintain last week’s positive momentum, instead recording losses across the entire Merino range.”
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