Australian wool prices fall

The Australian wool market fell sharply this week as a stronger Australian dollar and weak buyer interest pushed prices lower, industry analysts said on Friday.
The AWEX Eastern Market Indicator (EMI) fell by three percent, losing 23 cents to finish the week at 744 cents a kg clean, based on falls of 29 cents in the northern market (Sydney) and 18 cents in the southern market (Melbourne).
Their indicators finished the week at 756 cents a kg clean and 733 cents a kg clean respectively.
In Fremantle, the Western Region Indicator lost 15 cents to 726 cents a kg clean.
"The EMI struggled all week under pressure from further strengthening of the US exchange rate, the comparison with the better styled fine wools selling in Newcastle last week and a lack of widespread demand," Peter Morgan of the Australian Wool Industries Secretariat said.
Falls were seen across all micron ranges at sales on Tuesday and Wednesday, before the market steadied on Thursday, Morgan said.
Woolbroker Landmark said the weakness in the northern indicator was "no surprise" following the quality offering at the specialist fine wool sale in Newcastle last week. This contributed to the northern 18 and 19 Micron Price Guides (MPG) falling by 45 cents to 1,083 cents a kg and 33 cents to 978 cents a kg clean, respectively.
"With the downward trend well and truly in place for the remainder of the market, nor was it a surprise to see further price falls - in some categories close to four percent," Landmark said.
"However, the fact that both other centres saw falls nearing two percent for similar categories is of concern," it said.
Even with the quality offering in Melbourne, the downward trend still affected prices, it said.
Notably, the western 19 MPG fell by 29 cents to 954 cents a kg, while the southern 22 MPG fell 27 cents to 722 cents a kg.
The strengthening Australian dollar, which traded above 71 US cents for most of the week, before rallying to just under 73 US cents on Thursday, also had a significant negative impact on the market.
This contributed to a high national pass-in rate with 22.1 percent of the week's 63,856 bales passed in.
Purchasing activity was again dominated by Chinese buyers, Morgan said.
Next week, a smaller national offering of 53,389 bales is rostered for sale in Sydney, Melbourne and Fremantle starting Tuesday.