Correction Hits Australian Wool Market
September 21, 2018

The Australian wool market has suffered corrections in Week 12. Quantities increased slightly as 35,630 bales were on offer. A major concern of industry stakeholders is production forecasts for this season, due in part to the dry conditions being felt in many parts of the country. When compared to the corresponding sale of the previous season, the national offering is currently 13.3 percent lower.

Prices were discounted from the opening lot and slowly but noticeably deteriorated as the sale progressed. By the final hammer, the price levels were generally 10 to 50 Australian cents below those achieved in the previous week's sale. Hardest hit in the falling market were the lower yielding, inferior style types and those possessing unfavorable length and strength results.

Conversely, a limited selection of better style wools with low cvh results held up particularly well, recording very little change for the series. The reduction in prices pushed the AWEX Eastern Market Indicator down by 27 cents, to close at 2,067 Australian cents. Due to currency movement, when viewed in U.S. dollar terms, the EMI fell only 3 U.S. cents.

Merino skirtings followed a similar path to the fleece and losses were felt across all types and descriptions. Prices were generally discounted by 20 to 50 Australian cents, with a large selection of wools carrying more than 4 percent vegetable matter most affected. A limited offering of skirtings with less than 2 percent vegetable matter attracted strong demand and were generally unchanged. The crossbred sector performed with mixed results.

General losses of between 10 to 60 Australian cents were recorded in the 25- to 28-micron range, while 32 micron managed a 10-cent increase. The oddment market recorded general falls of 10 to 30 Australian cents, the exception being a small selection of new season washing lambs. These wools were hotly contested and as a result were extreme.

Source: AWEX