 Merino Wool generally fared reasonably well up until June 22 but the 16-18 Micron categories recently hit the virtual brick wall.
Some commentators report a substantial slowing at retail after experiencing a sugar hit of increased sales late last year and in the first half of 22 as the population slowly emerged from lockdown. The recent poor market performance is suffering from diminishing consumer confidence and a change in the discretional spending as consumers adjust their budgets to meet the almost daily price increases in food, interest, petrol, energy, and many more. Merino Fleece continued to reflect the world’s economic issues with the price for all merino MPG’s eroding further last week. Wednesday opened cheaper which was contrary to the early market intel of a consolidating market. The better style and specified lots were least affected and the Non-Mulesed lots in Certified Integrity Schemes with the right specifications attracted good competition at this low price basis. The AWEX EMI closed on 1235c – down 20c at auction sales in Australia this week. Despite this, 86.7% of its 36,042 bale offering was traded in Sydney, Melbourne and Fremantle. The AUD strengthened against the USD by .6c this week and when expressed in USD, the EMI closed on 807c – down by a meagre 5c. Merino Skirtings have been outperforming the fleece sector for the past few weeks however Wednesday’s opening quotes were between 10-30c cheaper. Early reports from the sale room on Thursday indicated a new interest from a wider range of buyers which resulted in the market finishing on a better note. Crossbred combing wool opened 10c cheaper as seemed to be the trend for all combing types this week. In line with the merino’s, the market closed on Thursday fully firm. Merino Cardings results for this week were clearly split into Eastern and Western market outcomes. Sydney (-3c) and Melbourne (-17c) opened generally unchanged with the exception of poor style and low yielding lots which delivered a slightly cheaper result. Conversely, Fremantle Merino Cardings were dearer on both days delivering an 11c rise for the week. XB oddments found some favour this week. Despite the price remaining low, there was more buyer interest on these lots. |
| Rapidly rising inflation around the world has placed enormous pressure on the world’s governmental banking regulatory bodies to raise interest rates. These interest rate rises are an unexpected consequence of the extraordinary period we have just endured.
Whilst the industry headline 6 months ago was worldwide shipping and logistic indigestion adding unprecedented costs to our pipeline, this has now resulted in some logistic reform. Conversely, the rising cost of fuel, energy and official interest rates all working against a return to some sort of new normal. Next week’s offering is scheduled to offer 35,881 bales on Tuesday and Wednesday. The EMI has not registered a positive movement in 2 selling weeks and in that time it has reduced by 16.1%. YTD we have seen a 5.6% increase in bales offered at auction. The AWTA have only measured .1% increase in bales sampled meaning more wool has been sold than sampled. Interestingly AWTA report a 15% reduction in bales tested in September. ~ Marty Moses |