Western woolgrowers watch and wait as wool market waived a week

WA woolgrowers will have to watch and wait to know if prices are going to rebound with another non sale week scheduled for Fremantle following a 12 cent hit to the market to 1320c/kg in week seven of trading.

There will be no Fremantle wool sale on August 23, although sales will still take place in Sydney and Melbourne on August 21 and 22 — with the national quantity expected to drop to 39,962 bales.

Prices dropped for the second consecutive week between August 14 and 16, undoing the good start to the season.

The Eastern Market Indicator closed down 13 cents to 1163c/kg — a drop of 13 per cent year on year from 1342c/kg.

The Western Wool Index closed at 1320c/kg on August 16, down from 1459c/kg a year ago, as the national turnover for the week reached $57.7 million.

The low market results have clipped a whopping $56 million off the nation’s total sales turnover during the first seven weeks of the wool selling season, which starts in July and ends in June the following year.

National wool sales so far have been worth $220m, compared with the $275m turnover made in the first seven weeks of last season.

Australian Wool Exchange senior market analyst Lionel Plunkett said 46,367 bales were offered in the sale which saw declines in all types of wool, with Merino fleeces taking the biggest hits.

Mr Plunkett said it was a quieter time of year for shearing in WA.

“A lack of quantity dictates that there is no need for a sale (during week eight) in Fremantle,” he said.

Week eight has traditionally been a non sale week in the auction calendar, along with two weeks in June, while there are also scheduled recesses for three weeks mid year and Christmas, as well as one recess week at Easter.

The Sydney and Melbourne sales on August 21 and 23 coincidentally run at the same time as Wool Week in Melbourne.

WA Shearing Industry Association president Darren Spencer said that shearing had been quiet the past few months but contractors were “gearing up” across the State.

“It has been a bit quiet and the weather has delayed some, but there will be a big rush on coming into late August and September,” Mr Spencer said.

He said May to July was typically a slower season for shearers, especially in the higher rainfall areas of the State.

Mr Plunkett said currency continued to play a large role in the wool market’s movements.

“Although the loss in the EMI was minimal (1.1 per cent in Australian dollar terms) a 1.11 cent drop in the dollar compared to the US, meant that when viewed in US dollar terms the EMI lost 21 cents, a 2.7 per cent fall,” Mr Plunkett said.

Episode 3 market analyst Mike Avery said in his “Herd Instinct” report on August 14, that most forecasters were predicting that “the general global economic conditions will continue to be the driver of the market with relief unlikely until sometime in 2024”.

“This would mean that the wool market will follow the pattern of the last two seasons, which saw prices not return to their opening levels until well into the New Year.”