Australian wool exporters are calling December’s buoyed prices a “Santa rally”, finishing the year with turnover of more than $2.5 billion dollars - the largest amount since 2002 when the national offering was 62 per cent higher.
The calendar-year closed with the Eastern Market Indicator at a record high at 1355 cents a kilogram, a 90 cent jump year-on-year.
Wool exporter Len Tenace, managing director Segard Masurel, said pent-up buyer demand resulted in a pre-Christmas inspired “Santa rally” this month.
“Customers were hanging back for cheaper prices but a shipping necessity, in time for the Chinese new year in January, meant there was a lot of pent-up demand through December,” Mr Tenace said.
This year’s average price of $1478 paid per bale was the highest on the Australian Wool Exchange (AWEX) database in two decades.
The EMI peaked at 1378c/kg on 30 November, attributed to a lull in supply due to the wet conditions impacting the transport of bales and shearing.
“In store receivals were behind a month because the wet weather caused the season to run late,” Mr Tenace said.
“The season fell behind but has since caught up.
“Prices have enticed more volume onto the market so once sales resume in January, the volume will be slightly less than this time last year.”
The November sale marked a fresh five-year high after prices jumped 15c on the week prior, inspired by a shortage of Superfine types.
In April, the EMI dipped to 1217c/kg while the yearly average was 1293c/kg.
The northern sale peaked on 1 December at 1821c/kg, paid for 16.5 micron Merino fleece, and averaged 1322c/kg for the year.
The highest price at the southern sale was 1783c/kg, paid for 16.5m fleece in November, with the regional indicator av 1273c/kg for the year.
The west auctions peaked also peaked in November at 1728c/kg, paid for 18m fleece, while Fremantle’s yearly auctions averaged 1365c/kg.
The Melbourne wool auction dominated supply, offering 51pc of the total national offering, while Sydney and Fremantle offered 29pc and 20pc respectively.
Sydney topped the auctions with the highest clearance recorded at 94pc, with 493540 bales sold, while Melbourne and Fremantle cleared 92pc and 91pc respectively.
“The late season had an impact on volume available therefore the low supply fuelled the competitive demand,” Mr Tenace said.
A substantial order for Chinese uniforms influenced superfine wool prices from May through to November, while a new fur-like fabric trend buoyed 18-22m indicators.
China retained its position as the dominant customer, acquiring 71pc of wool offered this year.
India cemented its place as the second highest buyer of Australian wool with 8pc of exports, while Korea and Italy received 4pc and 5pc respectively of wool sold.
Export giant Techwool Trading held its ground as the largest procurer of Australian wool, absorbing 14pc of the national clip, or 343,805 bales this season.
Chinatex and Fox & Lillie were the second largest buyers, both purchasing about 9pc of the market offering.
Mr Tenace said export concerns about challenges securing fine wool would intensify next year.
“The seasonal conditions is helping the production forecast for the rest of the season which is up 2.2pc, but it tends to make fine micron wool profile get more broad,” he said. “People are showing some concern about the security of fine wool supply.”
He said there would be customer pressure on prices to remain at current levels in the new year.
“Wool prices can’t keep going up because there will be critical mass… where they won’t be absorbed by the end user,” Mr Tenace said.
He said pressure on declarations would increase next year, with processors pushing for mandatory wool declarations in the near future, while the consumer spotlight on animal welfare would heighten.
“I’m starting to get more demand for non-mulesed certified wool,” Mr Tenace said.
“This year was the turning point for that debate and it won’t be going away.”