The Australian wool market finished 3.1% higher, on average, at sales in Sydney, Melbourne and Fremantle this week.
The AWEX EMI rose by 25¢ (+2.9%), ending the week at 899¢/kg. This reflected increases of 29¢ (+3.2%) in the North and 21¢ (+2.4%) in the South, with their corresponding Regional Indicators finishing the week at 923¢ and 879¢ clean, respectively. The Western Indicator rose by 32¢ (+3.7%), finishing the week at 906¢.
In a two day sale in Sydney and Melbourne, the AWEX EMI rose by 25¢ on Wednesday and was unchanged on Thursday. In a one day sale in Fremantle, the Western Indicator rose by 32¢ on Wednesday.
35,166 bales were on offer, compared with 52,949 bales last week, of which 7.9% were passed in, comprised of 8.7% in Sydney, 6.4% in Melbourne and 10.3% in Fremantle. Pass-in rates for Merino fleece and skirtings were 7.1% and 6.6%, respectively. 3,747 bales (9.6%) were withdrawn prior to sale and re-offered bales made up 8.6% of this week's offering.
The US exchange rate (source RBA) was 0.41¢ higher on Tuesday when compared with Thursday of last week (Monday was a Bank Holiday). It was down by 0.21¢ on Wednesday and up by 0.95¢ on Thursday, to close at 86.60¢, up 1.15¢ (+1.3%) since the last sale.
The exchange rate against the Euro rose by 0.18 Euro cents (+0.3%) to close at 62.72 Euro cents on Thursday night. When looked at in other currencies, the AWEX EMI increased by 32¢ (+4.3%) in US terms and by 17¢ (+3.1%) in Euro terms when compared with the previous sale.
The EMI in US terms (779¢) is 84¢ above the 2002/03 peak of 695¢.
There is continuing volatility in the US exchange rate, being affected by the big swings in both directions in global stock markets and the Reserve Bank lifting interest rates by 0.25% on Wednesday.
The market opened on a very firm note with increases across all micron types and wool types in all centres. In particular, the offering of Tasmanian wool in Melbourne on Wednesday attracted very strong demand for the best fine wool types.
Thursday saw a settling, as the market held at Wednesday's level to close with 17 to 18.5 average Micron Price Guides (MPGs) up 20 to 35¢, 19 microns by 40¢, 19.5 to 21 micron by around 30¢ and 22 to 24 by 20 to 25¢. Skirtings were in keen demand again and while oddments were generally firm or moved up. Crossbreds were also in keen demand, with their MPGs finishing up by 5 to 7%.
Purchases were widely spread, with the reduction in activity by buyers for China again evident. There is still no news of any resolution of the Chinese wool quota issues. Meetings are taking place now between the Australian and Chinese Governments.
Sales will be held in Sydney, Melbourne and Fremantle next week, when 39,558 bales are currently rostered for sale. Present estimates for the following three sales vary from 46,800 to 48,400 bales, a decrease of 14.9% over the four sale period when compared with last year. These figures are down by around 10% when compared with last week's five week forecast.
The volumes offered to date (-19.1% down on last year) and expected to be offered over the next four weeks (-14.9%) are at historic lows with two day sales in the East and one day sales in the West. How much is due to wool being withheld from sale until the Chinese issues are resolved, the fall in production, the reduction in in-store and on-farm stocks or the weather is not yet clear.
