May 15, 2009
In a milestone week for wool, all four wool auction centers closed at 800¢ per kilogram (800¢/kg) or above this week for the first time since early October, although the market rose by just 0.5 percent at sales in Sydney, Melbourne and Fremantle.
But that new rise, coming on top of the ongoing gains in most weeks since March, was enough to push wool through the critical barrier at all centers. It has revitalized the wool market, but many woolgrowers say they still need prices to reach 900¢/kg before the ongoing decline in wool output ends and turns up again.
The benchmark eastern market indicator (EMI) this week rose by 4¢/kg to 834¢/kg, according to the Australian Wool Industries Secretariat (AWIS). The market has held up surprisingly well in the face of the latest surge in value of the Australian dollar, which has made wool more expensive for most of Australia's customers. AWIS, for instance, calculates that the EMI has now risen by 15 percent at auction in Australia since the upturn in the market at the beginning of March.
But the EMI has now risen by 35 percent in terms of U.S. currency, and it is up by 25 percent in euros since early March, emphasizing the underlying strength of the demand for wool, despite these much higher prices for Australia's major export customers.
Reprinted in part from Stock and Land, Australia