WA tipped to follow price lead

22 Jan, 2004 07:00 PM
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EASTERN states wool prices hit a nine-month high of 827c/kg clean last week while WA growers missed out on the action after no sales were held locally.

But local brokers expect prices to rise in WA this week, following the 36c/kg gain in the eastern market indicator.

Elders WA wool marketing manager Ken Walker said a smaller national offering and increased demand from mills had contributed to last week's increases, but he said the fundamentals in the market had not changed.

"We won't see the full gains from last week here because of the bigger quantities on the market," Mr Walker said. "But we will see better prices than the previous week."

He said some mills had immediate commitments to meet, putting pressure on the market.

"Demand hasn't suddenly increased, the mills have got very little greasy stocks so we will see these peaks as they need wool," Mr Walker said.

Landmark wool operations manager Wes Brake also said he believed there was a good chance WA prices would be stronger.

"It will be interesting to see how the market here in the west reacts and if we can carry through some of those gains," he said.

"There is probably a good chance that it will.

"It was a fairly positive market in the east last week, particularly the finer wools."

The biggest increases were in the 19.5 micron category for the southern region, up 86c/kg and the 18.5 micron in the northern region, up 70c/kg.

Mr Brake said the increase had been driven by increased business from India and Europe.

Itochu Wool was the biggest buyer, snapping up 4917 bales.

"The major buyers are pushing pretty hard at the moment and the dollar hasn't had that big an effect on the market," he said.

Mr Brake said there was no sale last week because of a lower volume of wool following the Christmas break.

Seven extra sales have been scheduled this selling season to provide a more consistent volume of wool coming onto the market.

About 22,520 bales of wool were scheduled for sale at Fremantle this week, 59,351 nationally.

Mr Walker said he expected consistent volumes between 50,000-60,000 bales a week coming onto the national market for the next month or so.

"This will probably see a steadying in the market because of the larger supply of wool coming onto it, particularly the medium to strong types," he said.

"There will be a fair supply of those."

Meanwhile, Fremantle leads the nation with the number of unsold wool in store at 195,063 bales, according to the Australian Wool Exchange.

The national total, at January 6, was 705,244 bales.

Other centre statistics: Sydney 119,764, Newcastle 24,951, Goulburn 29,672, Brisbane 31,308, Melbourne 89,542, Geelong 107,564, Adelaide 88,114 and Launceston 19,266.

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