Wool auction prices in Australia spiked this week, after a three-week summer break. Compared with the December 2010 close, the market indicator gained 121 cents, with all types of wools selling dearer.
The Australian dollar traded between 98.5 and 99.5 U.S. cents during wool sales this week. The Eastern Market Indicator (EMI) made the largest single day gain seen in over eight years on Wednesday with an 81 cent lift. Currently, the EMI, at 1152, is at levels not seen since February 2003.
Roberts Limited Wool Marketing Manager Eric Hutchinson said it's been a long time since such big gains have been seen in the market.
"I don't think I can remember the last time we saw the EMI go up 80 cents in a day and over 120 cents for the week," said Hutchinson.
In U.S. dollar terms, the EMI has lifted by similar amounts as the local currency. Unlike 2002-2003, even when the market peaked at 1192 cents in January 2003, in U.S. terms the EMI was only 696 cents due to the Australian dollar buying only 58 U.S. cents. With an exchange rate of almost parity, the EMI is now at 1145 U.S. cents so overseas customers are paying more than they have in a long time.
Reprinted in part from Wool Weekly, AU