Wool offerings down as trading market continues its slow pace

The Australian wool market continues to suffer from a lack of demand and confidence after the auction system kicked back into gear last week, meeting industry expectations of a slow restart after a three-week break in trading.

Australian Wool Exchange senior market analyst Lionel Plunkett said the market resumed with “a small overall loss” that took the Eastern Market Indicator to 1176c/kg, a drop of 3c for the week, while the Western Market Index dropped 7c to 1332c/kg.

Mr Plunkett said week six was normally a large trading week but this year it realised a drop in volume of 11,666 bales on the same week last year, reducing the number of bales sold so far in the 2023/24 season by 30,548 on the previous season, at a total of 128,885, compared with 159,433 for the first six weeks of trading last year.

“As shearing continued during the break, wool continued to make its way into brokers’ stores,” Mr Plunkett said.

“As this was the first opportunity to sell at auction since early July, this is traditionally one of the larger sales of the season.

According to Australian Wool Innovation, exporters were able to conduct some new business over the three-week break but volumes were minimal and prices remained at market value.

“China and India were most active (during the break), with inquiry from Europe sporadic,” an AWI spokesman said.

A reduction in the Australian dollar to US65c led to the two top Chinese buyers taking advantage of the rate, dominating the Merino fleece sector offering last week.

“Apart from the spirited bidding against each other, significant competition emanated from the export trading houses,” the AWI spokesman said.

“These local entities seemingly concentrated on their clients buying orders and some forward contract completions.”

Week seven is expected to be another reasonably large offering of about 46,874, as wool accumulated during the break makes its way to auction in Sydney, Melbourne and Fremantle.