Fall puts index at five-month low

Headshot of Bob Garnant
Bob GarnantCountryman
Fall puts index at five-month low
Camera IconFall puts index at five-month low Credit: Countryman

The Australian wool market finished 27c lower last week when a larger 50,790-bale offering brought the pass-in rate up to 23.7 per cent.

Australian Wool Industries Secretariat executive director Peter Morgan said growers reacted strongly to the fall which continued on the last day of trade.

"The Eastern Market Indicator finished at 1088c/kg clean," he said.

"It was a volatile week in which the US exchange rate rose by a total of 1.17c on Wednesday and Thursday, before falling 1.16c on Thursday in response to poor employment data in Australia."

An Australian Wool Exchange spokesman said EMI had fallen for the second consecutive week.

"It was the largest weekly fall in five months and, coincidently, now has the EMI at its lowest point in five months," the spokesman said.

"The sale was originally forecast to be the largest since January 2013, however the eventual offering was whittled down to just over 50,000 bales. The catalogue included a heavy weighting of superfine types out of the southern region which hosted the only Launceston sale for the year."

The Elders International Wool Report stated the large offering of superfine wool, including the stored supply from Tasmania set the scene for the negative trend.

"The lower the micron, the larger the price fall," the report said.

The Elders report said the large amount of wool being offered at present had been held back for several months.

"Medium Merino wools were still cheaper in Australia but decreased in price by 20 to 30 cents for the week as opposed to the finer end of the clip which saw losses around the 50c mark," it said.

"With nearly 25 per cent of the offering passed in and 3500 bales withdrawn prior to the sale, the larger size of offerings is dampening any price rises."

The Elders report said the missing ingredient was the sale of finished product to create the demand for raw material. The report added China was the missing link from a wool demand point of view.

"Analysts have been tying themselves in knots over the ups and downs of the recent data being released from China," it said.

"Given the Lunar New Year moves about from January to February, the measurements for exports (GDP) and the like vary greatly from year to year depending on whether the holiday reduces production for the month of January or not."

This week's national wool market will climb to 53,706 bales.

Thursday, February 13 *

AUCTIONS *

Australian Wool Exchange * CENTRE

Balesoffered

Balessold

Pass in rate

Bales w'drawn Northern 10,932 9391 14.1% 4.6% Southern 27,763 21,077 24.1% 5.6% Western 12,095 8296 31.4% 10.5% TOTAL 50,790 38,764 23.7% 6.6%

Western Market Indicator: *1109c/kg (-38)

Western region

(Micron indicator quotes c/kg clean) 18 1238 -50 19.5 1198 -39 22 1182 -40 18.5 1226 -57 20 1193 -39 MC 785 -9 19 1207 -45 21 1192 -36

Eastern Market Indicator: *1088c/kg (-27)

Southern Market Indicator: *1074c/kg (-22)

Southern region

(Micron indicator quotes c/kg clean) 16.5 1379 -44 19.5 1221 -37 25 854 -22 17 1320 -30 20 1207 -39 26 751 -20 17.5 1293 -30 21 1213 -28 28 674 -8 18 1262 -40 22 1213 -24 30 635 -7 18.5 1245 -35 23 - - 32 562 -4 19 1240 -33 24 - - MC 824 -5

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