The Australian wool market, with the assistance of a rapidly falling exchange rate, finished two percent higher, on average, at sales in Sydney, Melbourne and Fremantle this week. The AWEX EMI rose by 26c (+2.9 percent), ending the week at 925c/kg and 51c above the first sale after the mid-season break.
This reflected increases of 24c (2.6 percent) in the North and 28c (3.2 percent) in the South, with their corresponding Regional Indicators finishing the week at 947c and 907c clean, respectively. The Western Indicator rose by 1c (0.1 percent), finishing the week at 907c.
In a two-day sale in Sydney and Melbourne, the AWEX EMI rose by 11c on Wednesday and by 15c on Thursday. The Western Indicator rose by 1c on Wednesday in a one-day sale in Fremantle.
A total of 36,442 bales were on offer, compared with 35,166 bales last week, of which 10.6 percent were passed in, comprised of 8.9 percent in Sydney, 6.7 percent in Melbourne and 22.3 percent in Fremantle. Pass-in rates for Merino fleece and skirtings were 10.0 percent and 7.8 percent, respectively. A total of 2,118 bales (5.5 percent) were withdrawn prior to sale and re-offered bales made up 17.8 percent of this week's offering.
In a week of turmoil in global financial and share markets, the US exchange rate was 1.75c lower on Monday when compared with Thursday of last week. It was down by 0.98c on Tuesday, by 1.00c on Wednesday and by 2.30c on Thursday to close at 80.57c, down 6.03c (7.0 percent) since the last sale.
Further falls to below 80c occurred in overnight trading on Thursday night. The exchange rate against the euro also dropped sharply, falling by 2.70 euro cents (4.3 percent) to close at 60.02 Euro cents on Thursday night. When looked at in other currencies, the AWEX EMI fell by 34c (4.4 percent) in US terms and by 9c (1.6 percent) in Euro terms when compared with the previous sale.
Nevertheless, the EMI in US terms (745c) is 50c above the 2002/03 peak of 695c. The market again opened on a very firm note with increases across all micron types and wool types in all centres, except in the West where 21 to 24 micron wools eased slightly.
Thursday saw further gains, when only Sydney and Melbourne were selling, with the greatest gains in 20 to 23 micron wools. Week-on-week gains in average AWEX Micron Price Guides were 10c for 16.5 and 17.0 micron wools, 26c for 17.5, 30c to 35c for 18.0 to 23.0 and 18c for 24.0 microns.
Skirtings were in strong demand again, while oddments made small gains in the North and South on Wednesday only to fall back yesterday. Crossbreds had a good week, with gains of 20c plus in fine crossbred MPGs easing back to gains of 18c for 28 and 30 microns and 12c for 32 microns.
Purchases were again widely spread, with the reduction in activity by buyers for China again evident, but to a lesser extent. The Chinese wool quota issues remain unresolved. However the Chinese Ministry of Finance & Commerce confirmed at meetings with the Australian Government last Friday that 110 mkg of the annual quota of 287 mkg is yet to be filled.
Sales will be held in Newcastle, Melbourne and Fremantle next week, when 43,895 bales are currently rostered for sale. Present estimates for the following three sales vary from 44,200 to 47,500 bales, a decrease of 18.6 percent over the four sale period when compared with last year.
Sale quantities to date and over the next four weeks continue at low levels. This week's sale also included 17.8 percent of re-offered wools. As mentioned last week, how much is due to wool being withheld from sale until the Chinese issues are resolved, the fall in production, the reduction in in-store and on-farm stocks or the weather is not yet clear.
The Australian Wool Exchange (AWEX) said its eastern market indicator (EMI) rose by 15 cents to 925 cents a kilogram clean at sales on Thursday. AWEX said its northern indicator at sales in Sydney rose 14 cents to 947 c/kg and the southern indicator at sales in Melbourne rose by 17c to 907 c/kg.
In Sydney, 19-22 microns rose by 25 cents and 23 microns rose by 30c on strong demand. The finer end of the market was less intense, rising by around 10c. Strong buyer support kept rises by merino skirtings in line with the rest of the market. In Melbourne, merino fleece wools rose by 25c-40c.
Of the 13,514 bales offered, 5.0 percent was passed in. Sales continue in Newcastle on Tuesday with sales at Newcastle, Melbourne and Fremantle on Wednesday and at Newcastle and Melbourne on Thursday.
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