Dwindling Supply Sparks Demand for Australian Wool
April 20, 2018

The Australian Wool Market is heading into its traditional quiet period as autumn shearing programs are nearing completion and many farmers start to contemplate seeding. The slowdown in wool – combined with the historically low amount of wool being held in brokers’ stores – has buyers concerned about securing quantity.

These concerns have contributed to a high level of buyer demand. From the opening hammer strong buyer sentiment was evident this week, pushing prices up across the entire merino spectrum and across all types and descriptions.

Levels slowly but noticeably rose across both selling days, as buyers continually attempted to secure their share of the smaller offering. By the end of the sale, prices had generally increased by 40 to 70 Australian cents. This pushed the Benchmark Eastern Market Indicator up by 49 cents to close the week at 1,825 Australian cents – only 9 cents shy of the record set in February.

As the season progresses, so too does the amount of low yielding wool coming on to the market. Wools yielding less than 65 percent dry made up more than half of the national offering. Due to the prevalence of these types, buyers are finding it harder to average the lower yielding lots into their purchases. As a result, the discounts being applied to these wools are continually increasing. The crossbred sector also experienced strong rises as 26.0 through to 32.0 micron sold at levels 40 to 60 cents above those achieved at the previous sale. In addition, 25.0 micron was 60 to 130 Australian cents dearer.

The oddment market has risen for the fourth consecutive week. Prices generally rose by 20 to 60 Australian cents, pushing the three carding indicators up by an average of 31 cents. In the last month the three indicators have risen by an average of 108 cents.

Source: AWEX