 The AWEX EMI closed on 1263c, down 21c at auction sales in Australia last week. Just 84.7% of the 42,492 bales offered were cleared to the trade with 7.5% of the offering withdrawn before the sale commenced.
Competition was dominated by locally based exporters, with solid support coming from the large Chinese Topmakers. Whilst the early market intelligence indicated a slightly cheaper price basis, the end of week result was extremely disappointing and was exacerbated by the favourable AUD-USD exchange rate resulting from a 1.1% fall in the AUD.
Merino Fleece opened on a weaker basis with the MPG’s all struggling to maintain last week’s levels. A limited selection of good and best style FNF well specified and classed lots attracted keen interest whilst the high volume of poorly specified, low style, and medium and heavy VM fleece lines felt the worst of the price discounts. Support levels that had held since before Christmas broke with the 19 MPG falling below 1600c and 21 MPG falling below 1400c.
The market reflects the lack of confidence at this time as our major markets grapple with the financial pressures being felt as the post covid situation becomes reality. |
Merino Cardings saw further downward movements across each centre. Sydney -7c Melbourne -18c and Fremantle -47. Whilst the eastern centres MC price falls were mainly in the merino locks category, Fremantle took heavy hits on locks crutchings and stains. XB cardings were extremely variable from a very low-price basis.
Next week’s offering is scheduled for 45,963 bales offering on Tuesday and Wednesday.
Commentary
On reflection this week’s poor wool market result is extremely concerning. The 3.2% fall in the EMI in USD has me worried that this week’s expectations are not looking that rosy.
Despite the trades anticipation of business being done at the IWTO conference in Kyoto Japan, sadly it seems that orders for Chinese sales have essentially stopped. My sources have informed me that China is grappling with a progressive devaluation of the Yuan against the USD over the past few weeks, which has them in a negative mindset.
In addition, sales of Wool Tops have slowed into Europe substantially and whilst there is medium to long term confidence in the market at retail, the spot market looks to be heading to a much darker place for the next few months.
Whilst the market should be ok for the best specified, classed and superior style merino wools I expect the poor quality and poor specified and classed lots to attract further discounts, and unless the large Chinese indents step up next week, we could expect to see another 20-25c fall across the board.
-Marty Moses, Moes & Son |
