Australian Market Soars After South Africa FMD Outbreak
February 22, 2019
China has suspended all greasy imports from South Africa, due to an outbreak of Foot and Mouth Disease earlier in the year. As a result, the South African Wool Industry postponed the auction scheduled for this week. The postponement means an overall reduction of global auction wool supply, leading to a substantial increase in the Australian Wool Market in Week 34.
Melbourne sold in isolation on the first day of selling. The limited offering came under intense buyer pressure from the outset. Pushed mainly by Chinese interests, prices quickly increased 80 to 90 Australian cents. When sales resumed on the second day in Sydney and Fremantle, similar price rises were experienced. The price rises pushed the micron price guides for 21.0 micron in all three centers to all-time highs. The North and South MPGs also posted new records for 20.0 micron.
Worth noting, however, there was a distinct softening experienced on the final day of selling. This was reflected in the Eastern Market Indicator losing 9 cents on Thursday. The falling market was more evident in the Western region. Selling last, the Western indicator fell by 41 cents. The AWEX EMI added 59 cents for the series, closing the week at 2,027 Australian cents. The EMI has now risen for eight consecutive sales, adding a total of 178 cents during that period.
The crossbred sector continued to track sharply upward. Prices generally improved by 20 to 50 Australian cents. These increases pushed the MPGs for 28.0 and 30.0 micron further into record territory. Due to the spike in prices, many sellers holding wool in brokers store have decided to offer next week, pushing the national offering well beyond original estimates.