Merino fleece experiences hefty falls and crossbred combing wools under pressure

With the world economies suffering under the war between Russia and Ukraine, coupled with the flow on price increases of energy commodities, wages and cost of living items, it is hard to be positive of the short term price for wool.

Merino fleece experienced hefty falls in the 17-18.5 MPGs with falls from 47-64c recorded for the week. The heaviest losses were experienced in lots with a high CVh and over long fleece lots.

The 19µ and coarser MPG’s held their price levels on Tuesday, but weakened under the currency exchange pressure on Wednesday falling 5-15c. Good competition was received for well specified Certified Integrity Scheme lots which sold well above the market.

The AWEX EMI closed on 1224c down 32c at auction sales in Australia this week. The weaker tone substantially reduced the Auctions clearance rate to 82.9%, from the 37,347 bales offered as growers exercised their right to set reserves in the weaker market environment.

The AUD/USD currency exchange rate was not favourable this week with the AUD pushing through 67c on Wednesday, pushing the EMI in USD 820c down 14c.

The primary concern continues to be dominated by a lack of demand from our largest exporter of wool, China. Chinese Processors and Traders have been incredibly quiet recently, adopting a low risk purchasing strategy in the lead up to the Christmas recess.

Conversely the market has seen increased activity from Indian interests and welcomed the historical competition we expect from our European markets.

Merino Skirtings opened on Tuesday 20-30c cheaper and repeated the performance on Wednesday. The best style, low VM and superior specified lots were least affected.

Crossbred combing wools finer than 29.5 maintained last week’s levels until late on Wednesday, when they came under some price pressure. Little or no change was measured for 30µ and coarser.

This week’s offering is expected to reach 44,775 bales for the second last sale as we run into the Christmas recess. The market intelligence to date have expectations that next week will remain under negative price pressure from the high AUD, USD exchange rates.

With the world economies suffering under the war between Russia and Ukraine, coupled with the flow on price increases of energy commodities, wages and cost of living items, it is hard to be positive of the short term price for wool.

The other observation that we have made over the past week is the substantial increase in wool receipts as shearing has been freed up from the way too frequent rain events of early November.

In addition to that many clients have been delivering wool that has been held on farm for some time awaiting their roads to allow safe access. The early commencement of Chinese New Year on January 22 2023, may see the Chinese remain subdued in the wool market until early February 23.

As many of our clients have commenced wind rowing and some harvesting we wish you a safe and dry December.

~ Marty Moses