 The AWEX EMI closed on 1284c, down 26c at auction sales in Australia and in US terms the EMI fell just 6c, highlighting the effect of the appreciating value of the AUD against the USD.
With the AUD increasing by .89c (+1.5%) the rise drove the market further into the negative as the foreign exchange became the key focus of our predominant export destination, China. Exporters reported the continuation of poor business conditions, plus the deteriorating volumes of suitable wool types for the narrowing indent orders being issued from Chinese Top Makers. The Australian based exporters pushed the large Chinese Topmakers on the suitable lots as they were completing their orders. China was well supported by competition from India and Italy on the suitably specified lots. Merino Fleece opened cautiously in Sydney however in a totally unexpected result, Melbourne and Fremantle initially experienced larger falls. The NMI closed down 6c whilst the SMI fell by 10c whilst the WMI experienced a 40c fall for Tuesday. The FNF offering was least affected in the northern markets with some MPG’s maintaining their previous weeks levels. However the news of the western market collapse set the tone for Wednesdays sale, and whilst Sydney posted falls of 20-30c in the 17µ and finer the 17.5-19.0µ fell 10-20c as well as the 19.5 mpg which fell 44c due to the gravitational pull from the southern and western markets. Fremantle passed in 49% of its fleece offering. |
| Merino Skirtings were cheaper in line with the fleece movements. Lots with less than 2.5% VM initially opened down 5-10c, whilst the heavier VMB lots fell 20c. Wednesday saw the finer and FNF skirts hold their ground, whilst the heavy VM lines with heavy colour and or cott experienced price falls or 20-30c for the day. Crossbred combing wools were slightly cheaper in the southern markets and in the northern region there was insufficient crossbred wools offered to formulate a quote. Merino Cardings posted another poor result despite the northern MC holding firm on Tuesday. The past few months have been a struggle for the carding wool types and the negative market sentiment continued Wednesday with the MC giving back 40c. This week’s offering of 48,757 bales is expected to produce another challenging week for the EMI. The combination of some erosion in demand at the top making stage, and slowing signals in downstream processing has the market looking for a catalyst to reverse the negative trend. With the IWTO conference being held from the 16th May – 18th May there may be some new business emerging from the gathering of the trades. Don’t forget to register for this week’s Wool Forum where wool producers can hear from Industry leaders and discuss the big issues facing the sheep and wool industries. ~Marty Moses |