THE Eastern Market Wool Indicator rose above the elusive 1100 cents a kilogram mark for the first time in 12 months last week, and there’s more good news for woolgrowers with industry commentators tipping the market will remain firm to lift slightly in coming weeks.
Independent wool consultant, Andrew Dennis, Adelaide, South Australia, said the wool markets had had a good run for the last couple of weeks - something he expected would continue at least in the short term.
He said finally the Australian dollar's downward movement was playing into the hand of growers.
“There is better demand from China at the moment which we haven’t had for 12 months, there are more positives than negatives for the wool market at the moment,” Mr Dennis said.
He said traditionally China buyers were after 19.5 to 22 micron wool, but they were now buying more fine wool types.
“As well as always being strong on crossbreds and cardings, China buyers are starting to broaden their outlook to the fine and superfine end of the market, which is long overdue for some people.”
Mr Dennis predicted the market would go up at little, but nothing as extreme as 200c/kg.
“It’s the wrong time of year for that as we are well into the second half of the processing season. There is probably a little but more upside in the market but not a huge amount,” he said.
Mr Dennis said there was also more wool coming off hold and hitting the auction room.
“A fair few growers are trying to take advantage of the spike in prices, which is normal, but that always tests the market when we get an oversupply. But it seems to be normal cycle for the wool industry,” he said.
In terms of wool production, Mr Dennis doubted it be lower than last year.
“However, there are still a fair few sheep getting their heads cut off, so I don’t think production is going to increase markedly either.
“But sheep certainly look more attractive with current meat and wool prices then they used to.”
Auctions Plus and Wooltrade market operations manager, Tony Benson, Sydney, NSW, also anticipated the market would remain firm this week.
“We are seeing an increase of fresh wool hitting the market at the moment, and week-on-week we had 900 bales more last week,” he said.
“It’s good marketing by growers to take the opportunity to sell while the markets spiked rather than store it.”
At the West Wyalong Merino breeders sheep sale in NSW last week Landmark selling agent, Will Dean, West Wyalong, said restockers were steering around the shorn ewes and opting to pay $10 to $15 a head more for young woolly ewes, as the rebate of $20 to $30 of wool off them straight made it worth paying a premium.