Australian wool higher

In a very strong week with a small offering and an increasing US exchange rate, the Australian wool market finished 2.4 percent higher, on average, at sales in Sydney, Melbourne and Fremantle this week.
The AWEX EMI increased by 22c (+2.3 percent), ending the week at a season record equalling level of 962c/kg clean. This reflected increases of 23c (+2.4 percent) in the North and 22c (+2.4 percent) in the South, with their corresponding Regional Indicators finishing the week at 995c and 935c clean respectively. The Western Indicator rose by 23c (+2.4 percent), finishing the week at 968c/kg clean. The Northern Indicator is 2c below its season peak, the Southern Indicator is 1c above the previous peak and the Western Indicator is 8c below the season peak.
When compared with the start of the upward movement of the market in October, the EMI and the Northern, Southern and Western Indicators are now up by 221c (29.8 percent), 229c (29.9 percent), 215c (29.9 percent) and 251c (35.0 percent), respectively. 19 to 23 average AWEX Micron Price Guides (MPG) are up by 250c to 277c clean over the period and by 199c for 24 micron wools. At the fine end, the changes are 134c for 17 micron wool, 174c for 17.5, 184c for 18 and 215c for 18.5 micron wool.
43,198 bales were on offer, compared with 53,643 last week, of which 4.0 percent were passed in, comprised of 2.9 percent in Sydney, 3.7 percent in Melbourne and 5.2 percent in Fremantle. Pass in rates for Merino fleece and skirtings were 3.2 percent and 3.1 percent respectively. 1,141 bales (2.6 percent) were withdrawn prior to sale and re-offered wools made up 11.9 percent of this week's offering.
When looked at in other currencies, the AWEX EMI increased by 26c (+3.3 percent) in US terms and by 22c (+3.8 percent) in Euro terms when compared with the previous sale. The changes in the EMI in US and Euro currencies since mid October are now 247c US (+44.6 percent) and 148 Euro cents (+33.7 percent). The EMI in US terms (801c) is now 106c above the 2002/03 peak of 695c.
In a two day sale, the AWEX EMI rose by 8c on Wednesday and by 14c on Thursday. The Western Indicator rose by 11c on Wednesday and by 12c on Thursday. It was a very solid market in which 18.5 to 23 micron average MPGs rose by 28 to 32c clean, while increases for finer wools were more subdued ranging from 6c (16.5 microns) to 18c (17.5 microns).
Skirtings were again in very strong demand, and oddments were keenly sought with the average Merino Cardings MPG up 9c. Crossbred prices continued to lift during the week, particularly among the fine crossbreds.
Sales will be held in Sydney, Melbourne and Fremantle next week, when 53,534 bales are currently rostered for sale. Current estimates for the following three sales vary from 30,700 to 46,400, a fall of 15.1 percent over the four sale period when compared with last year. Supply is becoming a critical issue, with the forecast offerings slipping further behind last year.
It appears to having an increasing effect on the market as the season progresses, even allowing for the strong demand signals reported by The Woolmark Company.
China remains as the dominant buyer. The latest Australian Bureau of Statistics data shows that 71.1 percent of Australia's wool exports in March went to China, taking the progressive figure since July to 65.1 percent. There was no sale in South Africa this week.