Woolgrowers ask ‘hold or sell’ after market fall

Zach RelphCountryman
The Eastern Market Indicator closed at 1513¢/kg clean last Thursday.
Camera IconThe Eastern Market Indicator closed at 1513¢/kg clean last Thursday. Credit: Daniel Wilkins

Hold or sell? That was the question many Australian woolgrowers were pondering earlier this week in the aftermath of the wool market’s most significant trading fall in 16 years.

While wool merchants and agents assessed the damage caused in the fallout of the Eastern Market Indicator closing at 1513¢/kg clean last Thursday, farmers were determining if it was worth selling their clip.

It came as strong seller resistance met last week’s wool market downturn, with 16.7 per cent of wool withdrawn prior to sale before an increased pass-in rate of 35.8 per cent across Australia.

Elders wool selling centre manager Simon Hogan told Countryman market apprehension was noticeable after the EMI lost 163¢/kg last week, with woolgrowers asking: do we hold or sell?

“We don’t see a week like that very often and there is certainly a lot of pain,” he said.

“For growers, it is a difficult situation to assess after the market fell rapidly — do they hold or do they sell?

“It really is an individual client decision as to what they do.”

Mr Hogan, who is based in Melbourne, also said he was confident Chinese buyers would return to auctions in the coming weeks to boost market activity.

For Corrigin woolgrower Tony Guinness, last week’s market dip was not a surprise as global trade volatility intensifies.

Mr Guinness, who shears in January and does not have currently have wool on the market, said the wool value decline would not prompt him to rethink his on-farm plan.

“It is certainly a hiccup, but it’s too early to go making any drastic changes,” he said. “The farming program is pretty well set at this stage and I won’t be changing anything over what has happened.”

The Western Wool Centre in Fremantle had a one-week recess this week, with no sale held yesterday and today.

Sydney and Melbourne were the only centres in operation, offering 33,696 bales from 37,379 last week.

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails