Australian Wool Market Continues Recent Slide
October 26, 2018
The Australian wool market continued its downward slide in Week 17. A heavily reduced market was evident from the outset, and as the sale progressed buyer confidence slowly eroded to push prices down.
The finer microns were the hardest hit in the falling market. By the end of the series, 17.5 micron and finer were selling at levels 100 to 150 Australian cents below those achieved in the previous week. Nineteen micron and coarser did not sustain the same losses and were generally 50 to 75 Australian cents easier.
The Western region did not experience price reductions as large as the Eastern state’s markets. This was mainly because the Fremantle market was already trading at levels below Sydney and Melbourne. The AWEX Eastern Market Indicator fell by 72 cents on the first selling day – the largest daily fall in the EMI since 2003. This was followed by a further 24-cent reduction in the EMI on the second day of selling. The EMI lost a total of 96 cents for the week, closing at 1,874 Australian cents. This was also the largest weekly drop in the EMI since 2003.
The large price corrections were met with firm seller resistance. The national passed in rate was 23.6 percent for the week. This was the highest passed in rate since February 2014. This was on top of the 6.9 percent of wool that was withdrawn prior to sale.
The skirtings followed a very similar path to the fleece. General losses of between 100 and 150 Australian cents were experienced, and wool finer than 17.5 micron was most affected. The oddment sector had another week of large losses. Locks, stains and crutchings fell by 100 to 150 Australian cents, pushing the three carding indicators down by an average of 138 cents.
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