Prices rise but were short of predictions

Prices rise but were short of predictions


Wool
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This year’s opening day sales fell well short of brokers’ hopes of rivalling last year’s record-setting WWC opening.

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A JUMP in prices after a three-week recess marked the opening auctions of the second half of the current selling season at the Western Wool Centre (WWC) last week.

Buyers and brokers had expected a price hike, but while the Western Indicator (WI) shot up 53 cents to 2084c per kilogram clean and individual micron price guides jumped by up to 66c, this year’s opening day sales fell well short of brokers’ hopes of rivalling last year’s record-setting WWC opening.

While prices at the end of Tuesday last week – the WWC traded a day early so the Melbourne wool selling centre was not trading alone after the recess – were between 59c higher (18.5 micron) and 409c higher (21 micron) than a year ago, there were no records set.

The opening price run was also not as sustained as last year, grinding to a halt early on the second trading day at the WWC this year.

Woolgrowers and brokers had obviously expected prices to run higher and for longer as the pass-in rate on the opening day across all wool types was 14.2pc of the 5839-bale offering, which was 1308 bales fewer than on the first day last year.

It was a point noted by Australian Wool Exchange (AWEX) technical controller at the WWC, Andrew Rickwood, in his trading report.

“Interestingly, despite the price increases there were many sellers unwilling to meet the market, resulting in over 17pc of the fleece wool being passed in,” Mr Rickwood said.

On the second day, with 5572 bales on offer, buyers took what they could get with the overall pass-in rate retreating to 11.1pc, according to AWEX, as a large selection of wool with a high mid-break percentage dulled buyers’ interest.

“(High mid break wools) continually lost buyer support and became cheaper as the sale progressed,” Mr Rickwood said in his second report for the year.

“The prevalence of these types was the main factor in the individual micron price guides losing ground,” he said.

After the first week’s WWC trading of the year the WI finished at 2083c/kg and the micron price guides ranged from 2337c/kg and 9c up for the week for 18 micron wools to 2205c/kg and 60c up for 21 micron wools.

WWC prices now trail the main Melbourne wool market by about 20c/kg for mid micron wools and by up to 76c/kg for finer micron wools.

Trading at the WWC this week returned to normal on Wednesday and today with the total offering expected to shrink by 456 bales to 10,955 despite shearing happening on many farms now harvest is out of the way.

In his Southern Aurora forward wool market report for the week to January 10, Mike Avery said trading was light but some growers had taken advantage of the early price spike to hedge small quantities of 19 micron wool between 2200 and 2230c/kg for the April-May window.

The perennial problem and cost to the wool industry of overweight bales was raised at the WA Shearing Industry Association (WASIA) general meeting on Saturday with AWEX chief executive officer Mark Grave speaking on it.

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WASIA president Darren Spencer said wool bales being sent to the stores weighing more than the maximum of 204kg had been a long-term issue and a campaign by AWEX to resolve this was welcome.

Mr Spencer said some overweight bales arrived at woolstores will wool sticking out of the stitching after being pressed.

That ended up costing the woolgrower because the bales had to be opened, wool removed and then the bales re-weighed and re-pressed at their expense, he pointed out.

A set of scales in the shearing shed, costing $1500, could prevent overweight bales and ultimately save woolgrowers money, he said.

“If 10 overweight bales need to be repressed the cost would buy a set of scales,” Mr Spencer said.

“It’s a no brainer.”

WAFarmers livestock council vice president Steve McGuire said overweight bales were estimated to cost WA woolgrowers about $250,000 a year.

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