WA wool brokers offer 40,153 bales to reach Western Wool Centre sweet spot

By Mal Gill
May 11 2022 - 5:00am
Brokers keep bale offerings in sweet spot

WHETHER by design or coincidence, wool brokers appear to be abiding by an appeal to keep the weekly national live auction wool offering between 40,000 and 43,000 bales.

Last week, a total of 40,153 bales were offered nationally after an initial projection 41,293 would be listed for auction.

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That offering was 8599 bales fewer than the previous week, the Australian Wool Exchange (AWEX) weekly wool market report pointed out.

The previous week - week 43 of the national wool selling program - followed a one-week auctions recess for Easter and the 48,752 bales actually auctioned, was down from an initial projection of 52,312 bales, which would have made it the biggest selling week of the season so far.

During week 43, appeals by Peter Morris, managing director of Western Australia's largest wool exporter PJ Morris Wools, in a letter to brokers across Australia, to extend prompt payment for wool by seven days and to limit bale numbers on offer each week, became public.

"It would be smart marketing of the wool clip if brokers were not putting up more than about 40,000-43,000 bales for auction nationally in any one week of the remaining season," Mr Morris had written.

On the east coast, managing director of Endeavour Wool Exports and president of the Australian Council of Wool Exporters and Processors Josh Lamb, largely echoed Mr Morris' appeals in his own statement that week.

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For this week, AWEX has indicated an initial projection of 42,779 bales will be offered, but the actual offering is likely to come back from that, if lot withdrawals before auctions in previous weeks is any guide.

Despite weekly offerings being pared back from initial projections, AWEX's weekly wool market report pointed out so far this season 151,128 more bales had been offered than at the same time last season - a 10.8pc increase - and gross turnover from wool auctions was already $406.33 million ahead of last season.

At the Western Wool Centre (WWC) last week 8451 bales were offered - well under the 10,000 bale mark which seems to have an influence on which direction prices go.

Of those, 7891 changed hands, for a low 6.6 per cent passed-in rate in a market continuing to firm and driven by demand for good or best style wools with low vegetable matter.

Price rises for the week ranged from 45 cents (to 1338c per kilogram clean for 21 micron wools) to 17c (to 1924c/kg for 18.5 micron wools), while the Western Market Indicator added 43c to 1473c/kg compared to the benchmark Eastern Market Indicator which gained 24c to 1401c/kg.

While PJ Morris Wools and Techwool Trading remained in the top three on the WWC buyers' list last week, one notable change was Meliwa jumping into third place on the second trading day.

Meliwa services a smaller mill north of Beijing, it normally places sixth or seventh on the buyers' list and its WWC buyer Alan Brown is renowned for buying in falling markets rather than rising ones.

Smaller mills and processors in China were tipped to run into financial problems this month.

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