Wool succumbs to global economic fallout

Wool market succumbs to COVID-19's economic fallout

Sheep
The AWEX Eastern Market Indicator finished at 1287 cents a kilogram last week.

The AWEX Eastern Market Indicator finished at 1287 cents a kilogram last week.

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Prices fell sharply across all wool types and microns last week.

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Prices fell sharply across all wool types and microns last week.

Movement of goods globally has become increasingly challenging, and companies are looking to cut costs where possible.

The AWI reported that Chinese buyers feared the Australian wool industry may go into lockdown, which spurred stronger buying activity in the previous week.

With auctions continuing for the foreseeable future, these speculations may have been incorrect, and buyers may have met their short-term fill as a result.

Subsequently, last week's auctions had noticeably less buyer activity, seeing prices move into free fall.

Reductions of more than 150 cents a kilogram were seen for most types, with 18-micron wool out of Fremantle falling by 220c/kg, to finish at 1508c/kg.

The AWEX Eastern Market Indicator dropped by a staggering 10.8 per cent or 155c/kg, to finish the week at 1287c/kg. In US dollar terms, the EMI dropped 7.8pc or US67c/kg to finish at US788c/kg.

The high passed-in rate of 44.9pc demonstrated the lack of demand, but also that many growers are not willing to sell at these levels.

A total of 211 bales sold online last week.

The 16-micron wool sold to a top of 1400c/kg (greasy) or 1849c/kg (clean).

While 17-micron wool sold to 1120c/kg (greasy) or 1575c/kg (clean).

The 18-micron wool sold to a top of 1010c/kg (greasy) or 1530c/kg (clean).

While 19-micron wool sold to 1100c/kg (greasy) or 1447c/kg (clean).

The top price online went to two bales of 16.1-micron SUPAAAA Merino fleece.

The lot was offered by Jemalong Wool, branded G/SUGARLOAF and sold for 1400c/kg (greasy) or 1849c/kg (clean).

This week's auctions will see 44,000 bales offered.

The market has proven to be an unpredictable beast in recent times, and we will wait to see how the dynamic unfolds.

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