Average Australian wool prices slid to their lowest in over three-and-a-half years last week, failing to find support from a significant drop in the Australian dollar, analysts said on Friday.
The AWEX Eastern Market Indicator (EMI) fell eight cents to end the week at 698 cents a kg clean, based on losses of 16 cents in the northern market (Sydney) and one cent in the southern market (Melbourne).
The northern indicator ended the week at 703 cents a kg clean and the southern at 694 cents a kg clean. In Fremantle, the western indicator fell six cents to 681 cents a kg clean.
"In a disappointing week for all sectors of the industry, the closing EMI drifted below 700 cents for the first time since November 2001," said Peter Morgan of the Australian Wool Industries Secretariat said. Falls were seen across all micron ranges for fleece wools on Tuesday and Wednesday, before firming on Thursday, he said. "Despite all sectors of the export trade being active and the Australian dollar trading as low as 75.25 US cents, the price of wool continues to fall," said woolbroker Landmark. Interest at this week's sales was dominated by Chinese buyers.
The Australian dollar fell to trade just above 75 United States cents by the end of the week, from close to 77.5 United States cents at the start of the week.
A cheaper dollar makes Australian wool more affordable for overseas buyers.
The northern market suffered the worst price falls, with medium to broad wools down by over 20 cents a kg. A total of 50,001 bales were offered for sale nationally, with 14 passed in.
With reports of thin overseas business expected in coming weeks, there is little prospect that prices will improve in the short term, Landmark said. Next week, 53,382 bales are currently rostered for sale nationally.
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