WITH five trading weeks left in the current selling program at the Western Wool Centre (WWC), the Western Market Indicator (WMI) has hit its highest point in at least two years.
As a measure of wool market strength, the WMI topped out at 1509 cents per kilogram greasy at the end of last week's WWC trading - up 29c for the week and compared to a benchmark Eastern Market Indicator of 1427c/kg, up 26c for the week.
Australian Wool Exchange (AWEX) statistics show 1509c/kg is the highest the WMI has reached in the 45 weeks of the 2021-22 selling program so far.
The highest the WMI got in the previous 2020-21 season was 1477c/kg in June 2021, according to AWEX and the last two months of the 2019-20 season were at the height of the global COVID-19 pandemic with the WMI plummeting towards 1000c/kg.
Some wool brokers privately believe 1509c/kg could prove to be the WMI's peak for this season, with the wool market expected to track sideways this week.
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But the market's continuing strength this late in the selling program - normally into May demand and prices have started to diminish - has surprised many, particularly as it goes against trade headwinds that would normally be expected to drive prices down.
"When you look at it, the market now is still running some 50-100c higher than it was before Easter," said AWN WA wool manager Greg Tilbrook.
"Certainly, the currency has probably helped - the Australian dollar was worth 77c US just before Easter, but now it's down to 69c (most exported wool is paid for in US dollars)," Mr Tilbrook said.
"There are still massive logistics issues (due to shipping delays and China's commerce centre Shanghai expected to remain in COVID lockdown until at least the end of the month) but the exporters tell me the situation has improved a little bit lately.
"The other thing that has helped is less wool is being put up (for auction) at this time compared to last season - the market seems to be able to handle the number of bales going up each week, but there's still a bit of wool onfarm and in store."
Indicative fleece price rises last week at the WWC ranged from 53c (to 1977c/kg for 18.5 micron wools) to 21c (to 1434c/kg for 20 micron wools).
As further indication of the strength of the market, last week's indicative 18.5 micron fleece price was 240c higher than it was in week 45 last year and last week's 20 micron fleece price was 107c higher than the same time last year.
According to AWEX, of the 9049 bales put up for auction at the WWC last week, 7960 were sold, with Techwool Trading, PJ Morris Wools and Tianyu Wool at the top of the buyers' list.
This week the WWC's offering is projected to shrink to 8831 bales, while the national offering is projected to grow by 4831 bales to 46,129.