Wool market continues spinning down

Wool market continues spinning down


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Photo by Laura Ferguson.

Photo by Laura Ferguson.

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For the third week running, the wool market continued on its downward spiral.

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For the third week running, the wool market continued on its downward spiral.

At the closing of week 18, the Eastern Market Indicator (EMI) fell a further 20 cents a kilogram, to finish at 1854c/kg.

This was on a slightly increased offering of 35,784 bales, up 1262 on the week before.

Year-on-year, the national offering is down almost 94,000 bales, or 15 per cent. 

In the previous three weeks, the EMI has dropped a total of 169c/kg, and since its record high in August, the market has fallen 262c/kg, or 12pc.

And it appeared vendors remained unwilling to accept prices at these levels, with 16.7pc of bales passed-in.

Prior to the sale, 8.6pc of the offering was withdrawn, meaning the clearance rate for the week was just under 75pc.

The Southern Market Indicator was the only indicator to record slight category increases, but overall, it still fell 19c/kg, to close at 1830c/kg.

This figure is the lowest of the three indicators, with the northern indicator closing at 1891c/kg, and western indicator closing at 2005c/kg.

The total value of the wool sold was $60.9 million, which is $2072 a bale, taking the season total to $1.163 billion.

Skirtings were the best performing sector for the week, with modest gains of between 5-10c/kg.

Wool carrying less than 2pc vegetable matter attracted the largest competition.

Southern Aurora Markets partner Michael Avery said uncertainty was the key factor driving the market down, overriding the tight supply.

“Processors continued to hold back buying with reduced confidence that consumers will be willing to absorb these price levels into the future,” Mr Avery said.

He said it was interesting to reflect on the changing marketplace, where this time last year, the EMI was 1623c/kg, and the passed-in rate only 1.5pc.

But he said trying to predict the market with so many unknowns will continue to be difficult and “fraught with danger”.

What do you think is driving the market downwards? Comment below.

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