Subdued market loses ground

The national offering fell below 40,000 bales, with a total of 39,229 bales available for auction, making this the smallest sale since the beginning of March, of this 35,811 bales sold.

Western Australia offered 8367 of the total and sold 7518 by the end of the week.

The Western Market Indicator (WMI) fell by 15 cents per kilogram for the week to realise 1287c/kg, while the Eastern Market Indicator (EMI) lost a total of 20c/kg at the close of trade and was recorded at 1152c/kg.

The majority of the loss was felt on the first day of sales nationally, with the Fremantle market faltering by the largest amount in months, as the WMI fell 23c/kg on Tuesday.

This fall was following on from the lead of the Eastern sales also seeing price reductions on all Merino types and descriptions.

The quality of the wool offered affects the overall result and when there are larger quantities of low yielding, higher vm types, the prices reflect this, which was the case in WA where the better types attracted the higher prices.

Wednesday saw sellers withdraw about 19pc of the original numbers and the resulting smaller offering attracted stronger competition, especially on the higher quality, less than one per cent vm types.

This prompted the market to bounce back and at the end of the day the WMI finished up by 8c/kg.

AWI said since the close of selling the previous week, the major foreign exchange rate between the Australian dollar and the US dollar had traded well into the mid 0.65 cents and above. "Coinciding with the AUD value was the completion of traders forward orders for April shipment," AWI said.

"This allows exporters a few weeks of opportunistic buying for executing their next requirements which are their May shipments hence purchasing pressure was released and the market price reacted negatively."

AWN state manager wool and livestock, Greg Tilbrook, said there were a number of factors affecting wool price.

"Receivals have reduced considerably," MrTilbrook said.

"The quality of the wool offered is also a factor, and at the moment in WA quality was reflective of the seasonal conditions experienced last year and this is impacting the market pricing.

"But the currency value is actually the biggest impact on the market at the moment."

He said the quality of the wool was improving as new seasons' wool started to trickle in, but in the meantime there was still a large stock of quality wool that was topping up the market.

"I don't see a massive lift in the market coming," Mr Tilbrook said.

"We have not seen the xtra business done that will drive this market to the next level.

"The retail sector is very depressed because of interest rates and as a result consumer spending is low."

He said that this meant demand for garments wasn't lifting, but it was holding.

Next week has over 41,000 bales rostered nationally with WA's total being 9125.