The AWEX EMI closed on 1408c – down 5c at auction sales in Australia last week with 88.1% of the 47,251 bale offering cleared to the trade as the Australian Based exporters jostled with the Chinese and Italian Indent buyers and large early stage processors to complete their immediate commitments.
Despite the continuing logistic and finance challenges faced by the exporters and early stage processors, this week’s results were pretty encouraging, considering all of the external factors going on in the world.
The development of the Russian-Ukraine war was temporarily overshadowed in the news by the Earthquake in Fukushima, Japan, which seemed to only grab the media’s attention for a few days and then revert back to the Russian attack on Ukraine cities.
Merino Fleece opened solidly on Wednesday with the first hour of selling supported by a wide range of fleece buyers aggressively chasing the best specified and classed lots.
After the lunch break, one of the larger Chinese indents was noticeably absent from the bidding as others stepped in at a slightly lower price basis. This was most likely a direct reflection of the finance limitations caused by the snail paced logistics of containerisation and shipping extending the need for more finance to keep the market ticking over.
Lots with medium to heavy VM were irregular, as were the poorly specified and classed fleece lots which ended up 20-30c cheaper for the week. In addition, the AUD USD exchange rate commenced the selling week at 71.95c and climbed to 72.50c by the close of market on Thursday, which may have accounted for the slightly cheaper MPG’s. Best style fine fleeces in Non Mulesed Certified Integrity Schemes continued to attract a wide range of bidders paying prices well above the market quotes.
Merino Skirtings seemed to avoid the fleece price slippage with competition from the majority of Exporters & Top Makers competing fiercely on the selection of best style skirtings and short fleece types with low VM. The medium and high VM lots came under some price pressure.
Crossbreds were extremely irregular as the offering consisted of a wide range of types in the northern region making it hard to put together parcels of any one type. In fact some of the poorer style fleece were making less clean than their skirtings counterparts.
Merino Cardings performed better than last week overall with superfine and fine locks and stains attracting keen bidding throughout the week. Crossbred oddments remain irregular with some of the sub 25.5μ lots starting to open the price gap.
As mentioned over the past month, the EMI seems to be range trading in a tight price band, as someone pointed out rising and falling on about equal occasion.
Demand and supply, the two key drivers seem to be overshadowed by the logistic backlog which is stretching the finance capacity of the Exporters.
This week’s sales return to the normal Tues/Wed selling pattern, with Melbourne able to conduct a third selling day (Thursday), which has in turn pushed the national offering higher. 48,286 bales are currently expected to be offered in Sydney, Melbourne and Fremantle. I cannot see any major movements on the horizon from now until the Easter break.
~ Marty Moses