DECLINING volumes and a lower Australian dollar led to a firmer wool market last week.
The Western Market Indicator jumped both days of sales to finish the week at 1015 cents a kilogram.
Similar activity across the nation saw price jumps in all other centres with the market in the Eastern States finishing 26c/kg dearer at 992c/kg.
Elders zone wool manager Danny Burkett said the combination of individual growers passing-in and withdrawing wool from the sale, which had reduced supply significantly on a national level - and a slight reduction in the Australian dollar - helped the market reach its current levels.
"The base we reached in the market last week is very similar to the base prices from 2012," he said.
"It seems to me there is a support level around the 1060c/kg to 1080c/kg clean for 21 micron wool."
The pass-in rates were well down this week compared to the previous weeks which Mr Burkett put down to stronger support and more competition in the market.
"If we go back just four weeks we virtually only had two competing buyers on the market," he said.
"Competition has improved and those pass-in rates have reduced under the weight of that.
"On a local level it was also good to see that Australia Merino Exports have flown a representative over here for a physical presence, rather than just operating on a commission basis through a WA exporter.
"It only adds value and competition to our market as they were the second largest buyer on Wednesday last week."
Mr Burkett said the finer wools received stronger support last week, which was encouraging, albeit from such a low base.
"We saw the price difference between the 18 and 21 micron wool get to just 65c/kg clean, which is extremely low," he said.
"The finer wools did receive good support last week but because it has come from such a low base it wasn't as strong a change as it seemed."
According to Mr Burkett the market was following similar trading patterns to the same time last year.
He said if it continued to behave in the same way, producers could expect to see the market track sideways until the end of September when a change in quality and quantity would be put in front of buyers.
It would cause the market to move away from the two-tiered pricing system in place at the moment where high yields were keenly sort after at the expense of lower-yielding wools.
Westcoast Wools managing director Luke Grant said although the finer wools had performed better last week, he wouldn't expect to see a decent turn around in prices until the new season.
He said there were a lot of finer micron wools in the market at the moment due to the seasonal conditions producers were having in the Eastern States, which was keeping the price premiums down.
Mr Grant said the weakening Australian dollar also helped to improve competition in the marketplace.
"A weakening dollar used to mean a weaker world-wide economy, but now it is not so much the case," he said.
"Our dollar has come down but the world situation hasn't changed and it seems to help things out a bit.
"The currency was at parity earlier this week so I would say we could expect a firm to dearer market this week as well."
Mr Grant said the subdued quantities also played a part in the positive market finish last week.
"New Zealand and South Africa have got some issues with quantity and if buyers can't get the cheap top-making wools they normally get from those areas, then they come here and get it," he said.
"We are also in the off-season now and it is a combination of buyers being short on stock and interest being created because the prices were low, plus the impacts of the low dollar.
"But I would predict this week's market to be better again."
