An air of insecurity surrounded the Australian wool market when it returned from its annual winter recess as military tensions between China and Taiwan increased and biosecurity fears posed threats to both buyers and producers.
The issues, however, are completely unrelated, as growers deal with the threat of foot and mouth disease and buyers contend with the geo-political issue.
The benchmark Eastern Market Indicator (EMI) dropped 45 cents for the series to finish at 1342c per kilogram, clean.
Some Merino lines were 99c/kg cheaper than when they closed off before the winter recess.
Analysts, nevertheless, are attributing the large fall almost completely to a stronger Australian dollar.
Nutrien Ag Solutions south eastern wool broker David Hart said FMD is playing heavily on the minds of producers and put pressure on their decisions when it came to selling their clip.
"The threat of FMD is influencing the sale instructions producers are giving us as far as whether to reserve their offering or at what level to meet the market," Mr Hart said.
"From their point of view, the biosecurity risk is something they can protect themselves from to a certain extent by selling the wool now rather than be left holding it.
"There is a much higher than normal percentage of growers who are electing to be much more flexible in their instructions - in other words, they want money in the bank rather being left with the wool if something bad happens."
But the geo-political issue between China and Taiwan would be playing more on the minds of industry buyers.
He said buyers are mindful of the risk of military hostilities breaking out, but realise there is nothing that can be done about it.
"For buyers it is business as usual as it's something they can't control," Mr Hart said.
"There is certainly a risk there, but they can't pull the shutters down under fear of something going on or something happening that may never happen - they have to carry on."
However, most concern for the industry was placed on the general melee of the Chinese economy resulting from harsh lockdowns that they placed themselves under.
And it seems like it has had a hefty impact on China's economic growth.
According to Rabobank's latest agribusiness report, projections of annual economy growth sit just three per cent above 2021.
For China that's low, with an average annual growth normally between 7 and 8pc.
According to Independent Commodities analyst Andrew Woods, current demand from China is poor.
"Downstream along the supply chain, demand is varied, with domestic Chinese demand, apart from uniform orders, extremely weak," Mr Woods said.
"This is not a new factor, but one that continues to develop.
"The saving grace for the supply chain is continued demand from North America and Europe."
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But Mr Woods said the combination of a large offering and a 3pc rise in the Australian dollar to the US dollar during the recess were obvious factors in the lower prices.
"With the start of the new northern hemisphere autumn/winter retail close at hand, the supply chain will be waiting and watching closely for indications on what is selling where and in what volume," Mr Woods said.
"For the greasy wool market, the waiting by the supply chain for this information means prices are unlikely to rise in the next month or so."
Of the 55,363 bales offered, 77.6pc cleared while 7pc of the offering was withdrawn before the sale commenced.
And the bales are not slowing down in the short-term with the first three weeks of the new selling season forecast an offering just short of 150,000 bales compared to 110,000 last year.
But the continued wet season could play havoc with producer's well-laid plans as to when they sell their clips.
Mr Hart said the countryside is as wet as it has ever been in NSW, disrupting the pattern of wool flow into the stores.
And the market was likely to see both lags and surges of offerings.
"Some growers, after the recent rain event, don't know when they will get their wool out - there is water just laying across the country," he said.
"They are feeling a bit vulnerable. Even if they wanted to get it out onto the market and sell it they can't at the moment because it is still in the shearing shed."
