Seeking a few bumps in a long flat road for fibre

Wool continues to navigate global turbulence

Sheep
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Online interest for wool started to spark this as market conditions bump along.

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Signs of a bounce in the wool market started to emerge this week, from a low base.

Signs of a bounce in the wool market started to emerge this week, from a low base.

The Australian wool market continued its downward trajectory last week.

Lacklustre overseas demand due to COVID-19 is plaguing the industry.

At home, the market downturn was reflected by the Australian Wool Exchange (AWEX) Eastern Market Indicator (EMI) losing 46 cents a kilogram last Tuesday and 25c/kg on Wednesday, to close at 858c/kg - or 631c/kg in US Dollar terms.

An average 21.5 per cent pass-in rate across the week highlighted that there is still a volume of growers who are unwilling to sell their wool at the current levels.

The AuctionsPlus online offer board was used sporadically during last week, with 108 bales selling.

It is worth noting that of this, 80 per cent was sold in a flurry of buying activity at the end of the week.

Online 18 and 19-micron fleece wool sold up to 670c/kg and 590c/kg (greasy), or 1001c/kg and 915c/kg (clean).

In the 20 and 21-micron fleece wool categories, best performing lines sold up to 615c/kg and 626c/kg (greasy), or 923c/kg and 929c/kg (clean).

The top priced lot online this week was a line of 15.8-micron AAA Merino weaners fleece, which had a staple length of 73 millimetres and was offered by Elders Wool. It sold for 840c/kg (greasy), or 1458c/kg (clean), and was branded Eyrebrae.

An estimated 23,000 bales were scheduled to be offered at auctions across all three Australian selling centres this week and there appears to be signs of a bounce in the market.

There have been consistent inquiries online on the AuctionsPlus Offer Board and 70 bales had sold in the first three days of the week.

Whether this is a signal that the market has fallen to a point that mills find attractive remains to be seen.

Also, some have seen the wool market as already being potentially cheap - leading to many growers holding on to their wool and some other brokers having queries about buying wool.

There is little doubt that the wool market will recover when global economies get back into positive territory.

It is just the timeframe that remains to be seen.

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