Fleece prices slip as market shows fragility

Wool prices soften as market shows fragility due to coronavirus pandemic

Sheep
The wool and to a wider extent the sheep market is still in a fragile space as coronavirus (COVID-19) grips global economies.

The wool and to a wider extent the sheep market is still in a fragile space as coronavirus (COVID-19) grips global economies.

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Last week, the Australian wool market finally reacted to coronavirus.

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The Australian wool market finally reacted to the global coronavirus pandemic last week.

Global economies and share markets have been falling during the past few weeks, however, prior to this the wool market was holding its ground.

This market retraction was reflected by the AWEX Eastern Market Indicator losing 39 cents a kilogram.

The EMI lost a further 2c/kg on Wednesday and Thursday last week, to close off at 1521c/kg.

While the West Australian indicator lost 19c/kg and 27c/kg across the week, to close off at 1616c/kg.

The stepping back of the market saw buyers not utilise AuctionsPlus Wool, with only 22 bales sold online.

The 19-micron wool sold to a top of 950c/kg (greasy) or 1678c/kg (clean), and 20-micron wool sold to 1105c/kg (greasy) or 1697c/kg (clean).

While 24-micron crossbred weaners fleece sold to a top of 556c/kg (greasy) or 819c/kg (clean).

Looking forward, all three selling centres, Sydney, Melbourne and Fremantle, are open with an estimated 47,000 bales on offer.

Longer term, the wool and to a wider extent the sheep market is still in a fragile space.

The supply of wool in Australia will be on a downward trend as a result of the large numbers of stock killed and such poor lambing rates in 2019.

However, the coronavirus has led the world unwillingly into unprecedented times with global travel bans and whole sections of countries being quarantined for an indefinite period of time.

Closer to home, panic buying, the closure and postponement of sporting leagues, and widespread cancellations leave an air of uncertainty.

To predict how this virus will impact Australian agriculture is extremely difficult.

However, any tightening of global borders and reducing in global confidence will no doubt impact the nation and industry that exports heavily, like Australian wool.

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