THE return to record-breaking prices at the Western Wool Centre (WWC) last week has triggered a spike in this week’s live auctions offerings.
A combined 11,719-bale offering for the two sale days this week is the largest scheduled offering at the WWC so far this season and only the second to top 11,000 bales, according to Australian Wool Exchange (AWEX) statistics.
The next largest was the first sale week back after the three-week Christmas and new year recess when 11,411 bales were offered and 9963 sold at prices generally about 80 cents a kilogram lower than they were last week.
Price guides for typical WA Wheatbelt 21 and 22 micron fleece broke new ground on Wednesday last week at the WWC, towing the rest of the mid-micron price guides along with them.
The 20, 19.5 and 19 micron guides finished Wednesday’s trading within 16 cents, 40c and 76c respectively of their all-time record highs recorded last August.
Price guides for 18.5 and 18 micron wools were a bit further away at 114c and 189c shy of their September records.
While prices retreated between 49c and 54c across the micron spectrum on Thursday and the pass-in rate for bales failing to reach reserve price in bidding jumped from 5.8 per cent out to 17.8pc, the records initiated a flood of sell orders to brokers holding wool from summer shearings.
AWEX technical controller at the WWC, Andrew Rickwood, pointed out the 11,719-bale offering for this week was a 33pc increase on last week’s 8800 bales, the first time the offering had dipped below 9000 bales this year at the WWC.
“It’s a considerable increase over the number of bales we originally had estimated (two weeks ago) for this (week 35) sale,” Mr Rickwood said.
Wool prices and bale offerings at AWEX’s main Melbourne and Sydney selling centres have followed the same trajectory.
This week’s WWC offering is part of a 49,738-bale national offering, more than 8500 above what AWEX said in its weekly wool market report it was expecting.
Some of last week’s price push was attributed by AWEX and brokers at the WWC to concerns about supply after a major South African wool sale was postponed this month because of a possible suspension of wool imports by China as a result of a Foot and Mouth disease outbreak in January.
Brokers acknowledged some of this week’s pumped up offering and a sudden rush of sell orders could also be attributed to the South African situation.
South African woolgrowers produce a good micron spread of Merino wools but in much less quantity than Australian woolgrowers.
According to brokers, while South Africa’s volumes do not threaten Australia’s wool markets, the South African market is important to China because it can source some wool there when it wants to balance out rising prices in Australia.
Wool sourced from South Africa can essentially become a temporary brake on sudden price rises on Australian wool markets, they said.
