Prices tumble at opening sales
The Australian wool market's Eastern Market Indicator (EMI) suffered its biggest drop since the global financial crisis at last week's opening sales.
The AWEX EMI dropped 67 cents/kg to finish just below 1000c/kg clean for the first time since November 2010.
The 50,363 bale national offering saw pass-in rates soar to over 20 per cent with only 39,598 bales cleared to the trade.
The National Council of Wool Selling Brokers of Australia executive director Chris Wilcox said the week's ending 995c/kg EMI was the largest week-to-week percentage drop in $A since October 2008 when it hit a low of 717c/kg.
"Given the continued economic problems in Europe and that the US economy is struggling to get traction, the fact that wool prices have held up so well has been encouraging," Mr Wilcox said.
"In addition to the weak demand, the fact that the $A lifted by 4 per cent against the $US since the three week recess began was another factor contributing to the extent of the decline."
Mr Wilcox said in spite of the drop in wool prices last week, wool values were still performing better than competing fibres.
Wagin woolgrower and principal of Belmont Park Merino stud, Malcolm Edward, said he was expecting the market to drop but was still willing to meet the market with a consignment of 70 bales in last week's Primaries catalogue.
"With only a six-bale consignment passed in, we still sold above appraisal with a top price of 748c/kg for 16 bales of 21 micron," Malcolm said.
Primaries wool representative Mark Screagh said the Edward family's Belmont Park clip was very sound and sold above market expectations.
Malcolm's son, Raymond, who classed the wool during their July shearing, said fleece weights were up by 500g due to availability of green feed up to December.
"As an owner/classer, close observation of each season's wool clip helps tune our sheep feeding regime," Raymond said.
The Edwards normally hold off selling their July-shorn wool clip until post Christmas but a property acquisition this year was the reason to sell the wool in store.
"It is unfortunate that with Europe in financial crisis, we are dependent on what China is prepared to pay for our wool," Malcolm said.
A national offering of 43,710 bales of wool is rostered for sale this week.
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