Wool market takes a hit
The wool market was hit with a correction last week when the Eastern Market Indicator (EMI) closed 43c/kg clean down.
The National Council of Wool Selling Brokers of Australia executive director Chris Wilcox said the price retreat was due to lacklustre ordering and demand conditions within the wool textile industry.
"This, combined with increased auction offerings, and the price retreat is not that surprising," Mr Wilcox said.
He said the statistics released last week showed Australian exports were down by 6 per cent in the first quarter.
"The drop was mainly due to a 16 per cent decline in exports to Europe and 26 per cent slump in exports to East Asia," he said. "Exports to China were down by 2 per cent, while exports to India were up by 4 per cent."
Australian Wool Industries Secretariat representative Peter Morgan said the six-week run of wool price rises that took the EMI from 940c to 1048c came to a sudden halt last week.
"The sudden rise in the market has been a surprise to many in the trade and there was uncertainty as to whether the factors driving the increase were short or longer term," he said.
Elders national wool manager Andrew Dennis said after the market lifted by 100 cents in October, a 50 per cent fall was normal market behaviour.
"However, the size of last week's fall was not normal with the sharp lift in the quantity of wool hitting the stores preventing a gradual correction," he said.
"We remain in the midst of a short-term supply boom with weekly rosters increasing to the highest levels in nearly two years in response to clear weather and good prices."
According to the Australian Wool Testing Authority (AWTA), wool tests for October were up by 16.4 per on the same month last year.
AWTA sampling operations manager Tim Steers said part of the reason was that cuts per head were up slightly this season.
Third-generation York woolgrower Denis Luelf said his family's 6000 breeding Merino ewe flock produced higher cuts this year.
Mr Luelf, his wife Joanne and their three sons - Chris, Brendan and Daniel - produce, on average, 300 bales per year on their 70/30 sheep/cropping properties. "We spread our clip out over several sales to spread the risk," Mr Luelf said while watching the wool auction proceedings last week.
The couple's Falconhurst clip of medium micron wool sold for between 1100c and 1250c/kg clean in the Westcoast Wools catalogue. "I was pleased that the consignments that did sell were of market value on the day," Mr Luelf said.
He said he had some reservations about the live export situation, after the latest incident in Pakistan.
"We will continue to produce Merinos that cut lots of wool and are dual-purpose," he said.
AWEX said the most recent estimate for this week's wool sales was 58,000 bales, to be offered in the three centres.
"A total of 208,000 bales are forecast to be offered for the month of November, which may be the largest offering over a four-week period in 22 months," AWEX said.
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