WOOL prices continue to demonstrate this year's volatility at auctions at the Western Wool Centre (WWC).
Australian Wool Exchange pricing and volume statistics indicate October was one of the more volatile months of an erratic year so far and wool trade last week at the WWC maintained that trend.
Peter Morris, who heads PJ Morris Wools, the biggest WA-based wool exporter, told the Australian Association of Agricultural Consultants (AAAC) WA annual Outlook conference on Thursday afternoon wool prices so far this year have been much more volatile than for most of the past 25 years.
"Because of the uncertainty in the supply chain and of demand (due to COVID-19) and our clients changing their ideas very rapidly this year (switching production from traditional suiting and uniforms to next-to-skin, active wear and casual wear to meet market opportunities), it means our market has been incredibly volatile," Mr Morris said.
"This year we've had the most days of market moves of over 5pc."
In the past 25 years the current level of volatility had only been matched during the SARS epidemic in 2003 and only just exceeded by the spike in volatility in 2001 at the end of the 10-year sell down of the Australian Wool Corporation's 4.7 million bales stockpile, Mr Morris said.
He advised woolgrowers to "push their brokers or advisers on how to achieve the best returns on the day".
They should seek advice on hedging by locking in part of their clip on forward markets and ensuring their broker could accommodate short notice to sell to capture best prices, he said.
The advice came as the WWC fleece price indicators shed between 51 cents (20 micron) and 65c (18.5 micron) on the first day's trading last week, then recovered to add between 9c (20 micron) and 19c (18.5 micron) the second day.
The Western Indicator finished the week down 38c at 1181c per kilogram clean after clawing back 10c of its earlier loss.
The WWC had been scheduled to offer 10,888 bales over the two days of trading last week - its largest offering and the first above 10,000 since the middle of March.
But big price fluctuations the previous week finishing with the WWC market significantly down on soft Melbourne and Sydney markets, convinced many woolgrowers to pull their wool from sale last week.
A quarter of the WWC fleece offering was withdrawn before the first sale day and 26 per cent was withdrawn before the second day, reducing the total number of bales on offer over both days to 8122.
Of the fleece left in the sales, more than 27pc was passed in both days.
PJ Morris Wools was the main buyer both days, taking more than 20pc of the reduced offering.
China-controlled Lempriere (Australia) and National trader Techwool Trading were second and third biggest buyers the first day and swapped positions the second.
One positive aspect from last week was that while prices in Melbourne and Sydney had stabilised by late on the second day of trading, because of the three-hour eastern daylight saving time difference the WWC continued trading and the market firmed after the eastern centres closed.
This could be a sign of better things to come this week with reduced offerings, both at the WWC and nationally.
It seems the wool market might have been listening when Mr Morris summed up the COVID-19 impacted year so far from his perspective for the audience at the AAAC conference.
"It's been a disaster, we didn't know whether we were going to get paid for our products, we didn't know if anything was going to be ordered, we had cancellations, we had time delays, we didn't know if we were going to get funding from the banks and we honestly didn't know how we were going to export the product," Mr Morris told the audience.
"It (COVID-19) was a hell of a shock through the whole industry, but we do see some green shoots now, we actually do see some improvements."
p While spring shearing has boosted the number of bales tested in October by the Australian Wool Testing Authority (AWTA), in WA the number was still significantly down on the number tested in October last season.
Last month 33,502 bales were tested in WA compared to 43,581 in October last season, a drop of 23.1pc, while across Australia 18.8pc fewer bales were tested this October.
So far this season 17.2pc fewer bales have been tested by AWTA in WA compared to the same four months last season, while across Australia the comparable drop was 12pc.
In WA in October the average wool yield and fibre diameter both declined slightly to 63.5pc and 19 micron respectively (64.7pc and 20.7 micron national averages), while the average staple length increased less than a millimetre to 89.1mm.
