Wool down 3.5pc for week

29 May, 2009 02:19 PM

WOOL prices fell by 3.5pc on average at sales in Sydney, Melbourne and Fremantle this week, taking wool's two-weeks' slide to 6.1pc since the market's recent peak in mid-May.

Half of the two weeks' fall can be attributed to a stronger $A, which has risen by 3.4pc against the $US in the same period, but the rest reflects genuine weakening demand.

The eastern market indicator (EMI) fell by 29c/kg (3.6pc), closing the week at 783c/kg.

In two-day sales in Sydney and Melbourne, the EMI fell by 17c/kg on Wednesday and by 12c/kg on Thursday.

Performance of the regional indicators for the week was:

• Sydney's northern indicator, down by 33c/kg (3.9pc) to 806c/kg.

• Melbourne's southern indicator, down by 26c/kg (3.3pc), to 764c/kg.

• Fremantle's western Indicator fell by 26c/kg (3.3pc), to 769c/kg, in a one day sale.

The further slide came despite a relatively small national offering of 40,111 bales, compared with 42,443 bales last week.

The $A-$US exchange rate closed on Thursday at 77.79c, up 0.3pc, since the last sale. But against the euro, the $A eased by 0.1pc, to close at 56.25 euro cents on Thursday.

So, when looked at in other currencies, the EMI fell by 3.3pc in US terms and by 3.7pc in euro terms, when compared with the previous sale.

The Australian Wool Industries Secretariat (AWIS) says it was another week of two different fibre diameter ranges, with the fine wools weakening again while medium and broad Merino types were hanging on reasonably well.

Wools up to 19.5 microns have fallen by around 10pc in the last two weeks, whereas 20 micron wools have come back by 5pc and 21 to 24 micron wools by around 3pc.

The fall for finer types, and for fleece wools in particular, has provoked strong grower resistance to sell at these prices, lifting the average pass-in rate to 18pc, while the pass-in rate for fine wools rose to 23.3pc and higher.

Sales will be held in Sydney and Melbourne next week, with 32,420 bales rostered for sale, with the following two sales rostered at 37,325 and 26,800 bales (Sydney and Melbourne only selling), respectively - that's an increase of 20.4pc over the three sale period when compared with last year.

AWIS and FarmOnline


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