Wool prices retreat across the board

In his WWC market report Australian Wool Exchange (AWEX) technical controller Andrew Rickwood said the passed-in rate of fleece lots offered for sale hit 37 per cent on Thursday last week as prices continued to retreat across all wool types and descriptions.

The overall passed-in rate across all lines was 29.7pc, according to AWEX, and followed a passed-in rate of 17.8pc the day before, when prices had started to slide.

To put that into perspective, at the previous week’s auctions when prices were creeping up, the passed-in rate on the Thursday had been 9.3pc and only 7.4pc on the Wednesday.

At 2675 bales, the offering last Thursday was significantly smaller than other recent offerings.

Buyers were not spoilt for choice, like they were with large offerings which usually registered higher passed-in rates because buyers could pick and choose what they bid on rather than accept what was offered.

The small offering seemed to mark a return to a more normal end of year situation when wool supplies usually dry up, basically because growers want their wool cheque to arrive in the new financial year rather than the current one.

Buyers were also not panicked into bidding on everything because there are only four more auction days scheduled at the WWC this financial year.

There are no auctions scheduled for next week, week 49, or for week 51 at the WWC and two weeks into the National Auction Selling Committee’s schedule for next financial year the WWC, along with the Sydney and Melbourne selling centres, shuts for three weeks.

“The passed-in rate in the fleece room was over 37pc, again showing grower reluctance to accept a reduction in price,” was Mr Rickwood’s take on last Thursday.

Alan Brown who buys for Chinatex, the biggest volume buyer at the WWC, and Greg Horne, who only buys the best styles for Modiano, were both unhappy with the quality of some of the wool on offer.

“There’s a lot of rubbish coming through,” said an irritated Mr Brown who normally keeps his own counsel.

He was not just grumbling about vegetable matter (VM) in the wool.

Record and near-record prices in the past few months have dragged reserves out of wool stores, but not all of the wool held in reserve for when ‘the price is right’ has been top quality.

Some of it has been poor specification, high VM, mid-break wool held back for just those times when buyers are desperate to maintain supplies to woollen mills and might be prepared to compromise on quality as a result.

Some growers and brokers appear to have perceived that with just two sale weeks left and only two weeks into next season before a three-week break, and projected small offerings to continue until spring shearing kicks in, it might be time to put the rubbish out.