Year finishes on high note
The Australian wool market closed in good shape going into the threeweek Christmas break, with the final sales of 2018 lifting the benchmark indicator by 13 cents/kg to close at 1862¢/kg clean.
AWEX senior market analyst Lionel Plunkett said with recess looming, buyers were aggressive to secure quantity from the 46,003bale national offering.
“This resulted in price increases across the entire Merino spectrum, with all types and descriptions enjoying gains,” he said.
“The Eastern Market Indicator has risen by 102¢/kg over the 2018 calendar year.” National Council of Wool Selling Brokers of Australia executive director Chris Wilcox said the first half of the 2018/19 season had been fascinating.
“Auction offerings fell sharply for the past six months, down by 21.6 per cent, to 772,965 bales,” he said. “The volume sold at auction dropped by 21.7 per cent to 694,702 bales.”
Mr Wilcox said the pass-in rate for the first six months of the season was 10.1 per cent, compared with a pass-in rate of 5.6 per cent in the first half of the 2017/18 season.
“The higher pass-in rate this season reflects a fall in prices from the peak in August, despite the average price levels for all wool, both Merino and crossbred, being higher this season than for the same period last year,” he said.
“Merino wool prices have had a stellar run over the past 18 months and more.”
Mr Wilcox said prices continued to lift from the start of the season to a peak in August, but then fell back in September and October to stabilise in November.
“They finished the first half of the season by rising in December,” he said.
“The EMI started the 2018/19 season at 2056¢/kg peaking at 2116¢/kg on August 17.”
Mr Wilcox said it was the highest week-ending level for the EMI, in nominal terms.
“The low point for the season to date was 1776 c/kg in early November. but this was above the season average price for all seasons since the start of market reporting in the 1970s,” he said.
“The EMI averaged 1967¢/kg in the first half of this season.”
Mr Wilcox said that figure was more than 200¢/kg higher than the average for the full 2017/18 season, which was a record year.
“The weight of wool tested was down by 12.6 per cent for the 2018/ 19 to November but the decline is not even across all micron categories,” he said.
“There has been an increase in the weight of wool tested for superfine wool, 18.5 microns and finer.”
Mr Wilcox said superfine wool for the 2018/19 season is set to be the highest on record.
“Production of wool in the 21 to 24-micron category will be down around 35 per cent for the year,” he said. “For the first four months of the 2018/19 season, Australia’s wool exports were 15 per cent lower by volume, but 15 per cent higher by value.”
The Elders International Wool Report said the market recess followed by the Chinese New Year shutdown would contribute to some volatility in January.