All types of Merino fleece enjoyed the Chinese orders back in the market, and whilst the competition was dominated by large Australian Trading Exporters, the Chinese Processors and Indents pushed for every lot.
Whilst all operators were still not operating, the price rises were reflected in the clearance rate.
Well specified lots with high yields, low VM, low CVh and high Nkt were keenly sought after, and whilst not too many lots were neglected this week, poor preparation or unclassed lots were certainly cheaper.
As always, the well specified lots in Certified Integrity Schemes topped the prices in most categories. Melbourne offered in isolation on Thursday and the main MPG’s continued to rise between 15 and 46c.
The AWEX EMI closed on 1278c – up 54c at auction sales in Australia this week – the largest weekly price rise in 18 months. 92.3% of the 40,616 bale offering cleared to the trade after 6.3% of the original offering was withdrawn before the sale commenced.
What a difference a day makes in the wool industry, with the reversal of the previous negative market sentiment based on an increase in Chinese orders being transacted over the weekend.
The return of some Chinese operators into the market has come about with news of some relaxation in the Covid lock-down policy. In addition, the market opened in the face of USD currency exchange rate peaking at 68.5c but as the day progressed, the rate headed downwards to 67c resulting in the EMI close +12c. This momentum continued throughout Wednesday, adding 32c to the MPG and when Melbourne sold in isolation on Thursday, another 10c gain resulted in the +54c weekly result for the EMI.
Merino Skirtings experienced rises in line with the fleece however some exporters sat and watched early in the week before following the trend. The best specified, low VM lots were keenly sought after.
Crossbred combing enjoyed a small rise in the market this week with best classed and specified lots holding the attention of the buyers. The XB buyer list was dominated by European interest taking 29% of the market.
Merino Cardings were barely maintained with an average fall of 7c experienced across the three selling centres. Crossbred Oddments remained at extremely low price levels.
This week posted the largest rise in the EMI in 18 months and has brought the optimists out of the cupboard after a period of great concern for wool producers. As they say- one market does not constitute a trend, and in this case I think we may need to see how the market performs next week to peer into the future of the wool market post 2022.
Speaking to the major exporters post sale, the business had gone deathly quiet at the time of penning this report. One hopes there has been enough business written to get us through next week’s 50,000 bale offering.
It is felt that more buyer activity would be needed from a wider range of customers before we would see a sustained escalation in price. Currently most Chinese wool purchases are for re-export to Europe destinations. In fact the Chinese domestic market for Wool Apparel is under extreme pressure with reduced volumes of sales being made at retail.
The market passed the billion-dollar turnover milestone in this series, taking just a week longer than in the previous season. Next week’s offering steps up to 49,693 bales – the largest offering this season and no doubt a result of the dry weather experienced in the past three weeks. Melbourne will offer in isolation on Thursday before sales break for the annual three-week Christmas recess.
~ Marty Moses, Moses and Son