Report hints at new year turnaround

The wool market benchmark fell by 21 cents last week but a firming Australian dollar kept the dip to a modest 6USc retreat, according to AWEX.

"The dollar closed at 96.67c, a gain of 1.26c for the week after hitting a four-month high of 97.49c only days earlier," AWEX said.

Closing the week at 1092c/kg, Australian Wool Industries Secretariat executive director Peter Morgan said the Eastern Market Indicator had varied between 1072c and 1128c over the past eight sales.

"Last week's softer sale was compounded by a rise of 1.09c in the US exchange rate," he said. "The falls were greater in Fremantle, but this was probably due to the stronger finish to the Western Market Indicator from the previous week."

Westcoast Wools manager Brad Faithfull said there was a traditional easing of the market at this time of year.

"We don't expect any dramatic price changes in the short term and are hoping for a different sort of market in the new year," he said.

In the latest International Wool Textile Organisation's market information report, wool economist Chris Wilcox said there were two key points that stood out.

The National Council of Wool Selling Brokers executive director said world wool production had stabilised to around 1.120 million kilograms clean, after falling to record lows since the 1990s.

"The report states wool production will not change much in the foreseeable future, which will provide a solid foundation for wool prices," he said.

Mr Wilcox's second key point of the IWTO report was centred on the difficult economic conditions.

"Weak retail sales and low world wool production caused a fall in global trade in raw wool and wool products in 2012," he said.

According to data in the report, Mr Wilcox said trade in almost all raw, semi-processed and finished wool products declined in 2012.

"The exceptions to this declining trend were woollen fabrics, women's wool trousers and wool blankets," he said.

Mr Wilcox said data on trade in wool products for 2013 to date suggested global trade in wool products fell in the first half of the year.

"For example, China's export of wool garments, wool fibre and wool yarn has fallen so far in 2013," he said. "However, raw wool exports from the major exporting countries have lifted in 2013 to date, suggesting an increase of wool products trade at some stage over the next six months."