‘Sparks’ as superfine prices surge

‘Sparks’ as superfine prices surge


Wool
Burt Arnall, "Lenore' Binda

Burt Arnall, "Lenore' Binda

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AS the famine for European style wool intensifies, buyers showed their cards at the designated superfine sale in Sydney on Thursday with desperate bids more than 80 cents a kilogram up on last week.

Aa

AS the famine for European style wool intensifies, buyers showed their cards at the designated superfine sale in Sydney on Thursday with desperate bids more than 80 cents a kilogram up on last week.

The Australian Wool Exchange’s Eastern Market Indicator (EMI), considered the industry’s benchmark, climbed a further 15c to 1437c/kg clean, an increase of six per cent since the turn of the year.

Buyers focus on micron was evident throughout the sale of nearly 45000 bales at the country’s three selling centres in Sydney, Melbourne and Fremantle.

Showstoppers of Sydney’s superfine sale were two bales accredited with the prestigious 1PP certification which were sold into Italian fabric company Reda’s 150PP Project, through New England Wool. 

To be certified 1PP a bale must be 16.9 micron or finer, contain 1pc vegetable matter or less, be at least 70 millimetres in length and exhibit superlative quality, style and soundness.

After four years in storage, Kelvin Vale, Uralla, New England, NSW, sold one of the 1PP bale at 6350c/kg, or $5322/bale.

The bale was from rugged Merinos, measured 14.6m, 0.1pc vegetable matter, 76.9pc yield and had a staple strength of 46 Newtons per kilotex.

It marked the seventh 1PP bale Kelvin Vale has sold into the REDA 150PP Project, which has acquired 128 bales in total since the initiative was launched in 2013.

The second bale was from the Picker family, Hillcreston, Bigga, NSW, from shedded Merinos selling under the Hillcreston/Pinehill brand. The bale measured 14m, 0.2VM, 41N/k and yielded 75.6pc.

The bale sold for $4521, or 6500c/kg clean.

Both bales will be combed, spun and woven in Italy for exclusive Reda Super 150’s suiting material.

“The price increase for the superfine market has added confidence and more of a spark to the game for wool producers,” New England Wool managing director Andrew Blanch said.

“While this is great most growers would like to see that for a couple of years before they make commercial decisions to either get back in or increase their numbers.” 

It was one of the last major opportunities to meet the needs of superfine-thirsty buyers, according G Schneider Australia’s Tim Marwedel, who said supply of top quality superfine fleece volumes evaporated from March to July.

The result was fierce competition on 19.5m and finer which were 25 to 50c/kg dearer with better styles below 17.5 the sweet spot, receiving the 80c/kg uplift.  

“This is a strong supply and demand market scenario,” Mr Marwedel said.

“Ever since the Goulburn sales ended, there have been dedicated growers that hold their clip for this week and it certainly paid its way.

“It is pleasing to see auction prices for merino, and in particular superfine merino wools, reach prices that give a clearer indication to the growers of the importance of these types to the Italian wool industry in general. We hope they are sustained.”

Italian weavers purchased the best styles of the 16.5-18.5m range and were hard to beat from a price perspective.

The skirting market followed suit with buyers’ frantic bidding boosting better styled 17m and finer skirtings above 100c/lg week-on-week, while 19.5m and finer rose 30-50c/kg.

“The market strength is evident with skirtings selling extremely well for good fine lots,” Mr Marwedel said.

“The grower’s average price per bale is helped tremendously by the value of the their skirtings.”  

The indicative dollars per 185kg average bale this week was $2427 for 17m, $2107 19m, $1712 21m and $1617 23m.

The market has flushed more than 1PP bales out of storage, with buyers concerned majority of country’s superfine selection had been sold this season.

“For the last 20 years growers have always had some stock available that was offered from week to week, but because of the strengthened prices, they market has enticed them out of storage and onto the market,” he said.

“There is some good fine wool that is over a year old selling.

“Supply is not dire, but is a situation where the market needs to pay those growers for their premium product. Buyers are being selective.”

The EMI in US currency also escalated 9c to US1096c/kg, an increase of 183c/kg year-on-year.

Mr Marwedel said the “hand-to-mouth” buying situation meant the currency fluctuations made less of an impact.

“With prices where they are though, if we stop selling it becomes a problem,” he said.

“We are finding some reluctance at these levels, which there always is, to pay these prices from the spinners and weavers because they could have commitments which are well below these levels.  

“Supply, or lack of it, is playing a greater role in the current auction price levels than any dramatic change in demand.”​

The story ‘Sparks’ as superfine prices surge first appeared on Farm Online.

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