Wool prices tumble as 60,000 bales go under the hammer across Australia

The Eastern Market Indicator eased by 37 cents a kilogram clean on the first day of trade where a 26.8 per cent pass in rate was recorded.

Brokers said woolgrowers continued to exercise a degree of caution, implementing a risk-adverse strategy for their selling approach as buyers kept a close watch on international markets.

READ MORE:

Elders Hamilton district wool manager Andrew Howells said more than 100,000 bales were set to go under the hammer in the next two weeks, making for a "big" resumption for the start of a new wool selling season.

"People are happy to sell something with FMD in the background to take some risk off the table," he said.

"Woolgrowers are generally happy but remain cautiously optimistic."

Good seasonal conditions, reasonable lambing percentages and promising premiums for fine wool grades are underpinning that optimism despite some big drops in the wool price this week.

"The bigger drops in price were at the finer end," Mr Howells said.

"Prices for 21 micron wool dropped 98 cents and that was the same for 17 micron as well."

At the close of trade on Tuesday, the EMI sat at 1350c/kg clean with still two days of trade remaining.

Some wool types, including Merino wool 16-21 micron, dropped by as much as 50-100c/kg clean in Melbourne during the opening hour of sales resuming.

Mr Howells said it was still too early to determine how the retail sector globally would bounce back in winter.

"It's too soon to see what retail sales are doing in the Northern Hemisphere because clothes are yet to hit the shelves for winter," he said.

"We're buying now for 2023's winter so buyers normally at this time of year watch to see what happens overseas, rather than buy frantically."

Australian Council of Wool Exporters and Processors executive director Peter Morgan said there was a degree of uncertainty among the industry due to FMD, but he expected export demand to be status quo.

"At the moment export demand is being driven by China, which it always is, after it took 80 per cent of all Australian wool exported last financial year," he said.

"We expect that to continue because the other countries, India and Italy, are still a long way behind China.

"They finished 12 months to the end of June taking between four and five per cent of Australia's exports."

Wool Producers Australia chief executive Jo Hall said woolgrowers were generally optimistic across the eastern states, however, risks associated with FMD were an ongoing concern.

"Producers are concerned because of the increased threat of FMD and the implications that could have on the trade if we were to get an incursion," Ms Hall said.

"We're hearing business decisions are being made on the back of that concern.

"For example, we've heard of people selling their entire clip rather than spreading their clip out over the entire year."

Ms Hall said woolgrowers' resilience in the wake of adversity would help them navigate the turbulent market as people considered how best to safe-guard themselves against FMD.