Market Updates
AWIS Wool market review - 9 May 2008
9 May 2008
The Australian wool market finished 2.5% lower, on average, at sales in Sydney, Melbourne and Fremantle this week.
The AWEX EMI fell by 20¢ (-2.2%), ending the week at 884¢/kg. This reflected decreases of 23¢ (-2.4%) in the North and 18¢ (-2.1%) in the South, with their corresponding Regional Indicators finishing the week at 927¢ and 849¢ clean, respectively. The Western Indicator fell by 27¢ (-3.0%), finishing the week at 868¢.
It was the first time the closing EMI had fallen below 900¢ since the second week in August, when it closed at 899¢.
In a two day sale in Sydney and Melbourne, the AWEX EMI fell by 22¢ on Wednesday and rose by 2¢ on Thursday. The Western Indicator fell by 29¢ on Wednesday and rose by 2¢ on Thursday in a two day sale in Fremantle.
48,646 bales were on offer, compared with 55,718 bales last week, of which 20.9% were passed in, comprised of 15.8% in Sydney, 17.0% in Melbourne and 34.5% in Fremantle. Pass-in rates for Merino fleece and skirtings were 23.7% and 21.8%, respectively. 2,961 bales (5.7%) were withdrawn prior to sale and re-offered bales made up 18.2% of this week's offering.
The re-offer rate, which was almost 20% of the offering, was the highest for the season.
The US exchange rate (source RBA) was 0.28¢ higher on Monday when compared with Thursday of last week. It was up by a further 0.39¢ on Tuesday, by 0.19¢ on Wednesday and down by 0.63¢ on Thursday to close at 94.00¢, up 0.23¢ (+0.2%) since the last sale. The exchange rate against the Euro rose by 1.37 Euro cents (+2.3%) to close at 61.37 Euro cents on Thursday night. When looked at in other currencies, the AWEX EMI decreased by 17¢ (-2.0%) in US terms and increased by 1¢ (+0.2%) in Euro terms when compared with the previous sale.
The market opened on a negative note amid uncertainty about where it might find a new level and rising US and Euro exchange rates. The grower response was to pass in 24.0% (37.7% in the West) of the offering on the day. Thursday's scene was much more positive, with an easing of the US exchange rate and a stronger presence from some buyers for China who have been relatively quiet in recent weeks.
Overall, falls were seen across all Merino types and micron ranges (particularly in the 19 to 22 micron range). But, once again prices for the lesser quality wools retreated more than those for the better styled, higher yielding stronger types.
Average AWEX Micron Price Guides (MPGs) were was unchanged clean for 16.5 microns, down by 8¢ for 17.0 microns, by 9¢ for 17.5 microns, by 6¢ for 18.0 microns, by 19¢ for 18.5 microns, by 29¢ for 19.0 microns and by 34¢ for 19.5 microns. The 20.0 micron wool average MPG was down by 22¢ clean, 21.0 microns by 21¢, 22.0 microns by 23¢, 23.0 microns by 20¢, and 24.0 microns by 14¢.
Prices for skirtings showed a similar pattern to fleece types, with a general easing on Wednesday, followed by a firming on Thursday.
Oddments finished the week on a very firm note after dropping on Wednesday. The Merino Cardings MPG was down by 2¢ for the week, but this was minor compared with weekly falls in the order of 20 to 30¢ seen since mid-March. Crossbreds again fared better than Merino types with their average MPGs being up by 5 to 10¢ at the fine end and by 1 to 2¢ for the medium and coarse wools.
Buyers for China were dominant with a strong presence from buyers for Europe and for India.
Sales will be held in Sydney, Melbourne and Fremantle next week, when 50,806 bales are currently rostered for sale. Present estimates for the following three sales vary from 33,200 (no Fremantle sale) to 46,510 bales, a decrease of 4.1% over the four sale period when compared with last year.
ABS export data for March was released during the week. Exports in the July - March period were 12.8% less by weight and 1.2% less by value in the July to March period than last year. Exports to China made up 63.3% of the total.
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