 Exporters are reporting very poor business conditions out of China at the end of last week so we can expect another tough week for the wool market.
The AWEX EMI closed on 1208c, down 1c at auction sales in Australia last week.
Despite the apparent sideways movement in a 5-week series of downward weekly price movements in the EMI in AUD terms, the AUD USD exchange rate strengthened with a 1.8c rise to 66.8c, delivering a 22c rise in the EMI in USD terms, courtesy of the Reserve bank increasing the official cash interest rate by another .25%.
Last week’s reduced offering of 33,435 was largely due to Fremantle reverting to fortnightly sales in the short term.
A clearance of 86.9% resulted, with the Melbourne fleece market contributing a 19.6% pass in rate for the week. It is no surprise that sellers are resisting the current prices on offer, when by reserving their wool, and when you consider the EMI is 16% (230c) lower than the same time last year, the pass in rate should be no surprise.
Despite recent downward pressure on price the trading conditions saw a little better competition from a wider range of exporters, which in turn challenged the previous weeks purchasing dominance from the large Chinese topmaking buyers.
Merino Fleece felt like there was a slight upward shift in the competition as the week unfolded, however 16.5-19.0µ MPG’s all fell short of last week’s levels whilst the 19.5µ and 20µ MPG’s rose by 17 and 8c respectively.
Purchasing power came from the large Australian trading exporters as the Chinese topmakers were more reluctant to hold the market levels. |
