Wool market falls for fifth week in row

The industry benchmark Eastern Market Indicator (EMI) dropped a further 16 cents a kilogram, closing Week 39 at 1947c/kg.

It was the fifth week in a row the EMI has fallen, after peaking at 2027c/kg in Week 34.

While the cause of the steep rise over a month ago was attributed to the suspension of imports to China from South Africa after a foot and mouth disease outbreak, industry analysts are indicating the fall is in relation to the increase of drought-affected wools coming onto the market.

Australian Wool Exchange senior market analyst Lionel Plunkett said in a continuing pattern, it appeared there had been the occurrence of "two markets".

"One for the good style, higher yielding wools, and one for the lesser style, lower yielding wools," Mr Plunkett said.

"Good style lots again attracted excellent buyer support, selling at levels very similar to those achieved at the previous sale, however the inferior wools were discounted again as buyers struggled to average them into their purchases."

The number of buyers unsatisfied with current prices increased.

A total of 11.8 per cent of the 37,405 bales offered was passed-in, an increase of 1.6pc on the previous week's rate.

This total offering was down 5724 bales on the previous week, and almost 179,000 bales, or 12.2pc, on last season.

The southern market saw the biggest drop of the three selling centres, with the Southern Market Indicator falling 16c/kg, to close the week at 1919c/kg.

The Northern Market Indicator fell 14c/kg to close at 1993c/kg, and the Western Market Indicator dropped 5c/kg, to close at the highest of the three, 2099c/kg, with most of its Micron Prices Guides actually rising.

The Australian Wool Testing Authority released its key test data for the month of March, indicating that just under 32,000 lots and 179,900 bales were tested.

The total bales was down 3.7pc on last season.

The total greasy weight was just over 32,000 tonnes, which was down 3.7pc on last season.

The average micron was 20.6, and yield 61.6pc.

Mr Plunkett said the amount of wool yielding less than 60pc dry would continue to rise.

He said in previous drought years, the highest number of low yielding wools were found in mid-April, during weeks 44 and 45, meaning they were most likely still to come.

"History shows us that the amount of low yielding wools will continue to rise over the next four weeks, continuing to put pressure on an already over-supplied section of the market," he said.