Exchange havoc with wool

23 Feb, 2014 01:00 AM
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4
 
It was the first time prices for 21 micron dropped below 1200c/kg.
It rose 1.17 cents on Wednesday and Thursday and then fell by 1.16c on Thursday
It was the first time prices for 21 micron dropped below 1200c/kg.

THE US exchange rate is playing havoc with the wool market.

Its volatile performance last week against the Australian dollar, where it rose 1.17 cents on Wednesday and Thursday and then fell by 1.16c on Thursday, impacted the market and resulted in significant price dips across all selling centres. It ended 0.30c lower to close at 89.34c.

There were 50,790 bales on offer, a significant jump on the week before with 44,935 up for sale.

The Western Market Indicator (WMI) fell by 38 cents a kilogram during the week to finish up at 1109c/kg.

The Eastern Market Indicator performed in much the same way and lost 27c/kg to close at 1088c/kg.

It was the first time prices for 21 micron dropped below 1200c/kg.

Growers reacted to the falling market last week with pass-in rates in Fremantle reaching 36.2 per cent.

But Primaries wool technician Greg Tilbrook said there was business done last Friday following the auctions, which he hoped would transfer into more sales this week.

"The movements in the currency puts a bit of uncertainty out there, in particular for the traders because if they buy it this week and next week the currency is up or down it means they have cheap or expensive wool," he said.

"But it is the sudden fluctuations in the market that have a big impact on trade."

Mr Tilbrook said last week was the first week since the pre-Christmas sales that levels for 21 micron wool had dipped below 1200c/kg.

"We have been trading around 1220c to 1250c/kg for 21 micron, and now it has just dipped below that price," he said.

"But we are hoping that wool with good specifications will be well sought after in the coming market as we have heard there is a lot of fault coming through in the wools from the Eastern States catalogues due to the dry conditions over there."

FarmWeekly
Date: Newest first | Oldest first

READER COMMENTS

Freshy
23/02/2014 7:03:17 AM, on The Land

Interesting article which shows that Australia isn't even in control of the wool industry. Every time theres an article written on wool its full of excuses as to why the market is dropping. How about something real and no more excuses
Love the country
24/02/2014 7:44:42 PM, on Stock & Land

Agree with freshy, always excuses, when the Aussie $ goes high they say, drop in wool prices, well whe it was at its highest , we got our best prices. They are playing with farmers big time, just like grain marketeers, they make more from a click on the computer, than those who do the hard work of producing.farm the farmer seems to be everyone's motto.
Jock Munro
25/02/2014 5:17:21 AM, on The Land

Well written Freshy. Why can't we have a co operative approach to the marketing of our wool clip?-we only need to look to Fonterra and the NZ dairy for an example to copy.
Ted O'Brien.
1/03/2014 4:45:28 PM, on The Land

"They" always make excuses when the price of anything drops, and "they" always start screaming the price is too high when things are going well. The volatility of our exchange rate is indeed a horrendous problem for wool, and has been for a very long time. It was the dramatic rise in the exchange rate in 2003 which killed the trade and prevented wool from recovering from the disastrous management of the Howard government when they dumped the last of the stockpile and forced producers to slash supply to a level which bankrupted the entire world trade in wool.

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