Wool’s fine lines receive price premium​

10 Feb, 2016 01:00 AM

Despite the largest national offerings since November 2010, this year’s wool market has been unwavering on December prices.

The Australian Wool Exchange (AWEX) Eastern Market Indicator (EMI) remains unchanged at 1265 cents per kilogram – matching the price close prior to Christmas.

Volumes rose early in the opening of the year with 53,000 bales and 59,775 bales offered in the first two respective weeks of the year.

Regardless of the increase in supply, the EMI peaked at 1296c/kg, its highest point since early August 2015.

AWEX senior market analyst Lionel Plunkett said in the past six week period, the market had peeled off the peak and stabilised.

“People would have assumed that the large offering would dampen the market but it didn’t seem to,” Mr Plunkett said.

Volumes had hovered about 40,000 bales offered weekly for the past month - significantly down on year-on-year supply – with prices softening in this period.

This restricted offering is attributed to the wet weather in the northern regions which was holding up shearing.

While the market news seems relatively subdued, underneath the unchanged EMI, fluctuating demand between differing market specifications had been more dramatic.

Merino micron was up between 20-26c/kg on December prices while crossbred wool at 30micron or more had been hit with a 34c/kg drop.

The bulk of the crossbred offering, from 27-29micron, had only softened 9c/kg on 2016 closing prices.

“We’ve been through the highest volumes we have had and as a consequence some of those crossbreds are cheaper for the 2016 year,” Mr Plunkett said.

While the EMI started and finished in the last two months at the same 1265c/kg mark, in this period it had also dropped as low as 1169c/kg late last year before stabilising.

The market’s good news story is in the high-end superfine microns, with selected lots receiving more than 500c/kg above the lower specification types, or an estimated average 100c/kg premium.

“At the moment there is a concern there is a shortage of those quality, higher-end types, and they will typically run out in the back end of summer and in to autumn,” Mr Plunkett said.

January market strength was reflected online with just under 1800 bales of grower wool traded over three weeks.

AuctionsPlus market operator Harriet Forster said exporters had looked online in the past week to source wool unavailable at auction.

Wooltrade sold just over 150 bales last week with 17-18m fleece receiving 1726c/kg dry, 19-20m at 1396c/kg and 1379c/kg and 21-22m wool from 1093-1385c/kg.

The top price for the week was paid for superfine weaner fleece wool which sold to 1726c/kg dry.

This lot, offered by Elders and branded Brooksdale, was 15 micron wool, 0.5per cent vegetable matter and was 70 millimetres long.

Ms Forster said next week could see a lack of demand due to the Chinese New Year with Chinese buyers quieter in their trading activities and banks and mills on holidays.

“Looking forward the focus now circles around interest from the Chinese mills when they return for business and what the exchange rate will be at that time,” she said.

All three selling centres at Sydney, Melbourne and Fremantle are open this week with over 40,000 bales on offer.

Annabelle Cleeland

Annabelle Cleeland

is the national sheep and wool writer for Fairfax Agricultural Media


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