Prices of Australian wool had an adverse impact this week
Prices were negatively affected at Australian wool auction this week by the decision to cancel sales last week because a service provider was not in a position to send the required data. AWEX - Australian Wool Exchange announced that 62,000 bales plus volume was the second-largest weekly supply in more than 10 years, which is too much for the market to handle.
Sales were terminated last week after the auction could not be arranged under the usual operating arrangement scenario, and postponement was considered the only option. Sales consisted of wool sales brokers and buyers/exporters.
For the current wool marketing season week 36, AWI - Australian Wool Innovation said "This was disappointing for the affected growers as many influential pundits were publicly expectant of a dearer market before the cancellation last week. The magnitude of the fall was tempered to a large degree by the massive passed in rate of 32 per cent on the final day of selling. This saw the weekly passed-in rate abnormally high at 23.7 per cent given the relatively minor fall in the Eastern Market Indicator (EMI)."
At 1561ac smooth/kg, the AWEX EMI dropped by 19ac or 1.2 percent. In US dollars, the indicator was only 2 to 1034usc clean / kg because the 1% AUD rise versus USD blocked the fall in that currency. In the Eastern Centers Merino fleece decreased by 20-40ac, but in the West there were considerably more falls.
Especially in the WA market, farmers refused to offer the lower prices and bought 40% of Merino fleece. 50acs fell down on skirts and 20ac less on cardings. The wools of Crossbred have almost maintained their qualities.
Also the commentary said "A relatively good offering of superfine Merino spinners and best top making types were perhaps the only unscathed sector, but even these were trending easier to buy on the final day. As far as wool type goes, this week could not have seen a more differing quality on display. Merino spinners wools yielding over 80 per cent dry were shown side by side with other wool from drought regions which barely hit 40 per cent dry. These drought-affected types were all 50ac lower for the week,"
The weekly sales were dominated by the large Chinese indent against Chinese leading manufacturers and local exporters. On the crossbred section, strong rivalry took place. Traders dominated the carding buying lists for the available skirts and processors.
Sydney and Fremantle cleaned up their respective behind - the-scenes due to a cancelation of sales last week, but Melbourne will have to do this next week. Next week 46,680 bales will be sold.