Weekly Wool Market Commentary By Moses And Son

Sales resumed after the 1 week Easter recess with the AWEX EMI closing on 1377c - up 10c at auction sales in Australia this week.

The market was aided by a weakening AUD USD exchange rate, which saw the AUD close the sale week on 71.2USc and consequently, the EMI fell 39USc.

The 48,752 bale offering resulted in a clearance of 89.2% with general price increases across the MPG’s with the exception being the slight fall in the Merino Carding indices (MC). Reports that our major customer, China who purchase over 80% wool exports is facing significant problems with manufacturing as rolling shutdowns of factories and strict lockdowns of entire cities and ports are implemented in attempts to tame the Covid spread.

Just two years ago, the shipment of wool was a three week process and today it is a minimum of eight weeks just to get the cargo through the Chinese ports, adding huge problems in sourcing the additional finance required to fund the purchases.

Merino Fleece increased the MPG’s from 11c to 21c in the northern region whilst the southern region results were mixed with their MPG’s, measuring movements between -6c to +24c.

Despite some early apprehension regarding exporters ability to purchase, the slightly larger offering support was forthcoming as the sale series progressed.

The Superfine FNF fleece attracted good competition from a wide range of exporters whilst the coarser FNF types were chased by the large Chinese indent buyers.

Off style and medium and heavy VM fleece lots were also supported by a number of the trade. As we have seen, the Certified NM clips demonstrated solid premiums to the market.

Merino Skirtings followed the fleece trend of firm to dearer. Exporters aggressively chased the low VM Superfine Skirtings with the majority skirting lots trading at levels slightly above the pre-Easter sale levels.

Crossbreds were almost unquotable as the offering consisted poorly prepared and coloured and cotted lots.

The Melbourne offering demonstrated a little more price clarity in the market direction which was clearly aided by the lower AUD exchange rate.

Merino Cardings traded sideways with the exception of superfine stains and crutchings which keenly chased at pre-Easter premiums.

XB oddments remained hard to quote especially the coarser types.

Next week, the national offering returns to a sensible 41,293 bales being offered on Tuesday and Wednesday. This reduction will be well received by the exporter and processor community who are struggling with the bottleneck in wool movement through the wool dumps and the delays in sea freight, which ultimately slow their payment cycles.

Some brokers have extended their terms to aid the exporters over this difficult time however, to my knowledge, large broker operators have not moved on their payment terms at this point. It is felt that next week’s market should maintain the current week’s levels.

- Marty Moses

• Topics:

• Wool