The outlook for Australian wool prices remains uncertain as a rising Australian dollar and weak buyer demand is likely to place further pressure on an already struggling wool market, analysts said on Monday. Last week, the AWEX Eastern Market Indicator (EMI) fell slightly, losing three cents to end the week at 745 cents a kg clean, with prices supported by the smallest offering of the season to date.
This week, a larger offering of 55,918 bales is currently offered for sale in Newcastle, Melbourne and Fremantle, starting Tuesday.
Movements in the Australian currency could heavily impact on wool prices this week, with the Australian dollar trading above the 76 US cent level on Monday morning, a sharp increase from the 74.5 US cents traded at the beginning of last week.
However, the specialist fine wool offering in Newcastle this week could provide some measure of support for the EMI.
In the longer term, a reduction in the price of US cotton could see wool prices fall further as some buyers turn to substitution, but this could be negated by a fall in oil prices, woolbroker Landmark said.
"Oil has dropped back to around US $48.50 a barrel which may bring some relief to consumer spending habits in the short term," Landmark said.
Comments
Comments are closed.