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Weakening dollar helps boost wool market

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The wool market posted its fifth consecutive weekly gain last week with a 17c/kg rise, as the Eastern Market Indicator finished at 1127c/kg clean.

AWEX said the EMI gain was carried mostly by the finer microns where improved sentiment boosted prices by 30c to 40c.

"Contributing to the strong market was a weakening Australian dollar when it dropped to 91.3USc," AWEX said.

Australian Wool Industries Secretariat executive director Peter Morgan said the Reserve Bank of Australia's governor, Glen Stevens, commented that the $A was still too high.

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"The EMI fell by 15c in US currency on Wednesday, but rose by 5c in Australian currency due to the US exchange rate being 1.9 per cent less than at the close of the previous Thursday," he said.

Looking at the apparel trade, National Council of Wool Selling Brokers of Australia executive director Chris Wilcox said the latest data from China and US was fairly mixed.

"Statistics on China's wool garment exports for 2013 to September shows that its exports of woven wool garments were well down on the same period in 2012. They were at the lowest level in the past six years," he said.

Mr Wilcox said the biggest decline in woven wool garments had been to the European Union.

"This reflects the economic recession in the EU, as retail sales and consumer spending has fallen, and a shift away from the more expensive wool clothing towards cheaper fibres," he said.

"There has also been a shift in the sourcing of wool woven garments by China due to the rising cost of garment making."

Mr Wilcox said China's exports of wool sweaters bounced back in September, reversing a year-on-year decline seen in the previous four months.

"Wool sweater exports from China jumped by 18 per cent," he said.

Mr Wilcox said US imports of wool clothing (apparel) were down by 6 per cent in volume terms and by 4 per cent in value terms.

"September was disappointing month, with wool clothing imports down by 12 per cent in value and 9 per cent for the month," he said, adding the decline in wool apparel imports compared with increases in imports of both cotton and synthetic fibre apparel," he said.

"China's share of US imports of wool clothing from all sources has fallen from a high of 64 per cent in 2010, to just 55 per cent for the first nine months of this year."

This week's wool sales currently have 47,726 bales rostered.

The present estimate for the following sale is 48,493 bales, ahead of the three-week Christmas recess.

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