Australia's physical wool auctions opened last week after a three-week winter recess to limited buyer demand.
The COVID-19 pandemic is still causing extremely low consumer confidence and no direction for the industry, which meant the wool market suffered one of its biggest falls.
The Australian Wool Exchange (AWEX) Eastern Market Indicator (EMI) fell 101 cents a kilogram on Tuesday and 27c/kg on Wednesday to finish at 1006c/kg. In US Dollar terms, this was down to 737c/kg.
The fall represents: the largest daily drop in the EMI since August 2019; the largest weekly fall since April 2020; and a slump in the market of 670c/kg lower than at the same time last year.
The western region market indicator lost 123c/kg and 24c/kg during the two-day sale last week to close at 1055c/kg.
Reports for the physical auctions highlight that some overseas mills decided to spectate only in the auctions, while others took advantage of the current position and bought wool. This led to low demand for the almost 50,000 bales on offer.
What's more, it was reported that when growers saw the current levels at which wool was being traded, they met the market - with many passed-in lots of wool being sold after the fall of the hammer.
On AuctionsPlus, there were a total of 138 bales on offer in last Thursday's Elders southern auction.
Despite the easing of the EMI, the online auction fared well and there was strong buyer demand.
The usual buyers were logged-in, resulting in an 86 per cent clearance.
The top price was for a line of AAA Merino 17-micron fleece, with 1 per cent vegetable matter. It sold for 1030c/kg (greasy). This lot was 78 millimetres in staple length and offered by the brand WG/WED.
A line of 19-micron Merino pieces, offered by the same grower, achieved 602c/kg (greasy). This lot had a vegetable matter of 2.1 per cent and staple length of 64mm .
Cooraminta offered 19.1-micron Merino bellies that returned 400c/kg (greasy). It had a vegetable matter of 3.9 per cent and staple length of 81mm.
The past week saw the AuctionsPlus online offer board used sparingly by buyers, who have little demand - or need to look for wool outside of the physical auction. There were five bales sold during the past seven days.
A line of 18.6-micron Merino pieces sold for 310c/kg greasy, or 729c/kg (clean).
Looking ahead, there has been strong inquiry online on the AuctionsPlus offer board - as many feel the market fell too far last week as people got too 'under-excited'.
Reports already suggest a positive opening at the physical auctions for this week.
