The price of wool has fallen sharply and some in the industry think it may fall further when sales recommence next week. The indicative price benchmark, the Australian Wool Exchange's Eastern Market Indicator, lost 21 cents to 1191 cents per kilogram clean in recent sales.
New England Wool's Andrew Blanch says the next sale will be the biggest in over a year, with 56,000 bales offered nationally. With so much wool, there could be a large percentage of the fiber passed in at auction.
"They're probably not confident to buy any wool that they don't require. Stock is a dirty word again," said Blanch. "Certainly the buyers overseas are waiting for a time to get in again when they feel it's getting close to the bottom and, unfortunately, we just don't know when that is."
In similar news, New Zealand Wool Services International Limited's General Manager John Dawson reports that the unacceptably high New Zealand dollar, high customer stock levels and restricted demand are continuing to subdue wool prices.
The market in New Zealand is following recent trends in other wool-producing markets. Client confidence is at a low point as they wait for increased consumer demand particularly from Europe and the United States.
Reprinted in part from ABC Rural, AU and Voxy