Wool to pick up in 2013

23 Dec, 2012 01:00 AM
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THE last sale of 2012 saw an easing in the market across all centres but things are expected to pick up in the new year.

The Western Market Indicator (WMI) fell eight cents per kilogram with larger falls in the east of 14c/kg.

But the softer market last week was expected after the previous two weeks saw the WMI and EMI jump 77c/kg and 67c/kg respectively.

It was also the largest offering of the season with 54,165 bales for sale.

The 18, 20 and 22 microns were hit the hardest after experiencing some of the biggest price rallies the week before last.

Westcoast Wools managing director Luke Grant said considering the size of the offering the market finished on a relatively strong note.

"This time of year is traditionally quiet, so keeping that in mind as well as the larger offering, we had a good finish," he said.

"There was plenty of good competition and we were happy with the way it ended."

Mr Grant said the stable finish indicated firmer results were expected in the first selling week of 2013.

"Prices will hopefully continue to creep up early next year but it is still hard to determine what the market is going to do," he said.

"We had a really flat patch earlier this season when the Chinese ran their stocks down, but people seem to be re-stocking now.

"Domestically the Chinese market is healthy but re-exporting is still slow which will have an impact on how high the price will go.

"But there are still people who have short positions to fill that have sold forward which point to a strong opening next year."

Wool Agency Company representative Peter Leroy said following the unexpected sharp push on the wool price in early December, the market finished lighter last week.

He said the finer end was affected the most while the 19 micron and broader saw gains of 5 to 10c/kg.

The pieces and bellies were the biggest losers with price drops of up to 40c/kg.

"Since the commencement of selling in 2012 we have seen a typical volatile wool market which closed last week in the same manner," he said.

"But we have also seen, especially in the last few weeks, more widespread buyer competition.

"While we are still around 150c/kg lower than this time last year, leading into the 2013 season we are optimistic the wool market will continue to strengthen."

In Fremantle there was still some sensitivity around the dumping issue of wool for overseas shipments but Mr Leroy said it was not yet a major concern.

He said wool, like all other commodities, was more sensitive to the demand from China, which was hard to determine.

"But the market seems to be stabilised around current levels and trade source are optimistic these prices will continue into the new year," he said.

"Historically the wool price is a little better in January and February, so we are hoping the same theory applies."

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