THE Australian Wool Exchange Eastern Market Indicator (AWEX-EMI) has continued on a sixteen-month high after the benchmark indicator remained unchanged, settling at 1331 cents per kilogram.
The market occurred after the second largest offering for the season was recorded, with almost 45,000 bales up for auction, about 30 per cent more than the previous sale.
The northern market indicator averaged 1375c/kg, up 3c/kg, however the major return winner for the week were Merino skirtings which rose 29c/kg, settling at 1128c/kg.
There was a slight softening for broader micron wool, with 28-micron clips falling 11c/kg, settling at 735c/kg, and 30-micron wool settling at 594c/kg after a 15c/kg fall.
The demand for finer micron fleeces remained high, with an 8c/kg rise for 17-micron wool, averaging 1669c/kg, resulting in a 12-month high for both northern and southern markets.
However, it was the southern market which supported 18-micron wool, recording a 15c/kg rise to settle at 1637c/kg average, compared to the northern market which fell 9c/kg for a 1641c/kg average.
The northern market had only 5pc of the 12,375 bales offered passed and Monaro Wool Services/Shute Bell manager Ben Litchfield, Cooma, said supply over the past five months had slowed, causing the current competition.
He said the market stability may be from the recent increase in bale volume and that this indicated the market’s ability to absorb the offerings.
“We are finding an element of timing and receival in the market – some clippings that would have hit the market already are in a bit of delay by about three weeks; the wet weather has caused delays in shearing,” Mr Litchfield said.
“It seems buyers and exporters are hungry for the apparel Merino microns too, so they are receiving a lot of support and causing a bit of competition. The main theme we are seeing at the moment in wool is the market is ready to meet supply – it’s a good story for wool given the amount being cleared each week.”
Although the wool industry at large is at a high point, especially the growing demand for finer clips from buyers and exporters, Mr Litchfield believes the only subdued point is the broader micron wool returns.
“It’s just not as a hot and bullish as it was about 12 months ago,” he said, pointing to a slight over supply.
He said the current backlog of broader micron wool had impacted buying from Chinese processors, but prices should increase once that had cleared.
“Reports from China are that a lot of the broader wool has been produced over the past 12 to 18 months.”
Mr Litchfield said the need for spinning blends for apparel production had led to increased demand for Merino skirting.
Elders wool sales manager Andrew Combe, Goulburn, said the optimistic trends within the wool market may remain solid for the short term, however the spring weather may change future returns.
“As we move into spring, vegetable matter in the wool will increase – the large amounts of grass will dry and put seed in the fleece and this will come with discounts,” he said.
“Although, the finer micron market is interesting and looks promising. The difference between 21- and 18-micron wool is as good as a few years ago because the European market is chasing these clips.”
Fourth generation grower, Adrian O’Keefe, “Bungoona”, Molong, is capitalising on the wool market upswing by retaining his wether lamb portion instead of selling over the hook to make the most of bountiful clip returns and excess feed.
Based on the sale of his last bales at the end of August, Mr O’keefe averaged about 980 cents per kilogram, with the July shorn lambs wool expected to hit similar returns in coming weeks.
Sold through the Sydney auction system, Mr O’Keefe said his strategy is based on market trends, saying the demand at the moment is stylish, clean wool.
“I sell straight away because I think your wool needs to be in the market promptly; it’s where the action is because they can see your wool and that’s what creates competition, and drives the return,” he said.
