Wool’s expected shorn supply could offer price boost
The country’s forecast tightening wool supply could emerge as a shot in the arm for the market, according to Primaries WA wool manager Greg Tilbrook.
Last Friday, the Australian Wool Production Forecasting Committee predicted shorn wool production to scale back 5 per cent to 285 million kilograms greasy for 2019-20.
It comes one day after the nation’s wool market fell into freefall, with the Eastern Market Indicator fleeced of 163¢/kg to close at 1513¢/kg clean after a turbulent week’s trading.
Mr Tilbrook said it was frustrating the Australian wool industry had been severely impacted by external global factors, including the US-China trade war and the uncertainty over Brexit.
But he remained hopeful the market would rebound on the back of the AWPFC’s latest production forecast.
“Supply is definitely going to get tighter over the next few months,” he said.
“We know Chinese buyers are going to come back in and buy at some point.
“Once they come back in I’m expecting the market to be reasonably firm because there will be good competition and a lack of supply — it is a matter of if and when that is going to happen.”
Australian Wool Innovation trade consultant Scott Carmody said buyers deserted auctions last week amid a lack of confidence caused in the global economy.
“No sector was left untouched as prices plummeted from the outset,” he said.
“Exporter buyers reported intent to buy from overseas was impossible, with even a low bid/offer lacking almost entirely.”
WA’s total wool shorn forecast for 2019-20 is 62.1m/kg greasy, according to AWPFC, to notch a 0.2 per cent decline year-on-year.
Drought-ravaged NSW is expected to suffer the greatest wool production fall and drop 11.4 per cent to 87.8m/kg greasy.
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