Australian wool market bounces back
The Australian wool market regained the 27c/kg it lost in the previous sale, and set the benchmark indicator at 1778c/kg clean during last week’s sale.
AWEX market analyst Lionel Plunkett said the welcome correction came after the Eastern Market Indicator fell for six consecutive trading days.
“The EMI rise seemed to be influenced by currency fluctuations,” he said.
“The Australian dollar fell 1.8 cents to US77 cents, which initially boosted the market before it was hampered by a half-cent increase on the final day.
“In US terms, the EMI barely moved, dipping 3 cents for the series. Overall, the Merino sector finished between 20c and 50c dearer.”
Elders said demand was not exactly buoyant, but machines still needed to be topped up.
“The after-Easter sale is pushing 50,000 bales, which will challenge the cash-strapped wool buyers who will be looking for more selective purchasing,” an Elders spokesman said.
“Prices for wool tops and yarn are starting to be offered on a twotier basis and a drop of 10c to 20c/ kg per month is about the worstcase scenario.
“There is a growing sense that consumers, particularly those who shop online, want to buy less often, but buy right. They are asking more questions of the retailer around sustainability and traceability of the product.
“Merino ticks most of the boxes for them and so the outlook for demand at the high end of production looks very good.
“At the other end of the scale, where manufacturers are producing a cheaper article for the masses, there is an ongoing struggle with current wool prices.
“The more technically savvy processors have been able to adapt the balance of fibre to offset some of the Merino price rise, but others may not be able to afford the same input specifications as last season.”