Influx of wool proves too much for buyers

Influx of supply proves too much for wool buyers

Sheep
With supply not meeting demand, the Eastern Market Indicator dropped by 1.2 per cent, to close at 1561 cents a kilogram for the week.

With supply not meeting demand, the Eastern Market Indicator dropped by 1.2 per cent, to close at 1561 cents a kilogram for the week.

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Last week's wool auctions resulted in a drop in prices across the all types.

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Last week's wool auctions resulted in a drop in prices across all types.

Supply essentially doubled this week as a result of the previous week's sales being cancelled.

AWEX reported that the offering of 62,000 bales was the second largest offering in more than a decade.

The influx of supply proved to be too much for buyers, and saw a passed-in rate of 23.7 per cent.

With supply not meeting demand, the Eastern Market Indicator dropped by 1.2pc, to close at 1561 cents a kilogram for the week.

In US dollar terms, this equates to 1034c/kg.

The most dramatic falls were seen in the west, where 18-micron wool fell by 84c/kg to close at 1861c/kg.

Chinese buyers dominated the week's auctions, competing against each other as well as the local exporters.

Online, activity roughly halved on the previous week's numbers, with 159 bales selling.

The 17 and 18-micron fleece wool sold up to 1320c/kg and 1240c/kg (greasy) or 1823c/kg and 1771c/kg (clean).

The 19 and 20-micron fleece wool sold up to 1060c/kg and 1039c/kg (greasy) or 1788c/kg and 1764c/kg (clean).

While 21-micron fleece sold up to 1122c/kg (greasy) or 1798c/kg (clean).

The top priced lot was a line of 17.7-micron AAA Merino fleece wool, which was 108 millimetres in length, and had the very low 0.2pc vegetable matter.

This lot was offered by Rural Co Wool, branded SPRING VALLEY and sold for 1320c/kg (greasy) or 1823c/kg (clean).

A price war between oil producers has exacerbated the effects of COVID-19 on global markets, bringing further falls to most sectors.

This may bring more uncertainty surrounding consumer demand for premium products.

Consumer statistics for February and March could be an indicator for the direction of the EMI in the short term.

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