 Whilst good demand from India and European interests for wool is providing small pockets of business for exporters, it is the sporadic demand from our largest client (China) which is supressing the much needed confidence essential to the entire pipeline in balance.
The US mid-term early election results pushed the AUD towards the .65usc mark in the sale week. Therefore, the EMI expressed in USc terms closed up 3c. Just 31,095 bales were offered after ~10% was withdrawn before the auction commenced this week and therefore the 85.9% clearance was a flattering reflection of growers’ sentiments. The AWEX EMI closed on 1241 – down 20c at auction sales in Australia last week. Merino Fleece: Whilst the falls in the Merino MPG’s moderated slightly this week, 16.5-18µ fell between 33 and 52c and the 18.5-21 MPG’s fell 10-22c. Merino Skirtings followed the lead of the fleece on Tuesday, however they found good support throughout Wednesday’s market to finish slightly firmer. Crossbreds of best style and specifications firmed by 10-15c on Tuesday and held their ground on the final day of selling. The well-classed clips, free of VM, colour and cotted wool attracted better competition than previous weeks. Keeping in mind that the XB MPG’s are bumbling along the bottom of the prices historically. |
| Merino Cardings held form in Sydney, whilst Melbourne and Fremantle wash off 8c and 16c respectively. Interestingly, the weekly movements in the MC has been due to the percentage of the offering with >2% of hard heads (e.g. Bathurst burr and Noogoora Burr) rather than being influenced by changing demand. Whilst the variation VMB can easily influence the MC, it is important to understand that an increase in the offering in Hard Heads content can drag the MC down without measuring any change in the prices of the other carbonising types.
Crossbred Oddments continue to be irregular working from a very low price base. Next week’s offering increases, with an expected 36,941 bales on offer. As mentioned in previous weeks, all segments of the supply chain are being severely hampered by difficulty in staffing their enterprises coupled with rising energy cost. Meanwhile inflation is out of control globally which may force our major customers into recession. The inflation has the consumers examining and re-examining their household budgets to ensure they can afford to exist. Based on the culmination of negative economic news coupled with the AUD exchange rates punching through 66 USc on Friday, at the time of penning this report the wool market looks set to suffer further losses and the hopes of a pre Xmas recovery seem to be less likely. |