WOOL price records continue be smashed as the Eastern Market Indicator performs an extraordinary 51 cents per kilogram week-on-week jump to crack 1500c/kg.
Nearly 41,000 bales were offered to the trade nationally and the market responded with solid rises from the opening bid of selling in the Eastern states’ markets to the fall of the final hammer in the Western region.
The value of wool sold was $66.5 million for an average $1637 per bale.
The Australian dollar was down a fraction against the US dollar, at 76.56c, which stimulated EMI gains in US terms to climb 34c, to US1148c/kg.
While intense trading in all wool sectors has driven the market to the highest ever level recorded by AWEX, it was the best superfine European types, finer than 19 micron, which received unappeasable competition to lift prices from 140-180c /kg.
Broader wools were also chased a further 55-70c/kg higher than last week’s levels.
Australian Wool Innovation (AWI) weekly market analysis revealed in the past two years the general wool price had increased by 407c/kg clean, or US298c/kg - 37 per cent and 35pc increase respectively.
Fox and Lillie wool marketing manager Eamon Timms said it was the wool starved mills of China which were driving the demand.
“The scale of the increase caught many exporters by surprise,” Mr Timms said.
Official shipping figures for January show more than 100,000 bales of wool left for China in January, a jump of 30pc on last year’s trading volume.
“Some users outside China are continuing to watch the show in amazement,” Mr Timms said.
“They say their clients around Europe are struggling to pay the new prices for fabric.
“Certainly there are some large vertical mills in Italy who are buying actively at these levels… But many others in Europe are concerned.”
Trade experts in China have reported the knitwear market on “fire”, and Mr Timms said finer garments for Chinese consumers was also contributing to the strength in fine fleece and skirting types.
He said a number of users in China were not sure whether to buy now or wait until the market comes off, with some opting to enter the crossbred market to supplement volumes.
The double-faced fabric demand which was a main catalyst for carding price rises in 2015 has reignited.
“This coming winter season in China they will have an emphasis on darker colours so this feeds into the market by pushing the price of poor colour/stained cardings to be closer to good colour price,” Mr Timms said.
Supply has reacted to the prices with a lift in the national offering next week to about 47,500 bales.
However with limited wool in storage, Elders district wool manager Rex Bennett, of Wangaratta, said what was hitting the market was from recently shorn flocks.
“With the spike in prices since Christmas, what wool has come in has been meeting the market people have been happy so sell,” Mr Bennett said.
“There is only the odd person which is holding out to the end of the financial year for financial reasons.”
While this week’s sudden rise has added up to $100/bale above valuations, he said woolgrowers and brokers were wary of the sharp increases.
“As quick as this wool market can go up, it can also retreat just as quick,” he said.
Annabelle Cleeland
Annabelle Cleeland is Fairfax Media’s national sheep and wool writer. Annabelle joined the Fairfax team in 2012 to nurture her love of Australian agriculture. She began as the Victorian western district reporter at Stock & Land before taking on a senior position as a journalist reporting on all industries statewide. Annabelle’s appetite to report on issues which affect the sheep and wool industry has seen her travel to many parts of Australia and abroad. She is excited to spin industry yarns during a period of substantial demand for the sheepmeat and wool industries. Annabelle enjoys horse riding and climbing mountains, and is a lazy supporter of the Geelong Football Club.
Annabelle Cleeland is Fairfax Media’s national sheep and wool writer. Annabelle joined the Fairfax team in 2012 to nurture her love of Australian agriculture. She began as the Victorian western district reporter at Stock & Land before taking on a senior position as a journalist reporting on all industries statewide. Annabelle’s appetite to report on issues which affect the sheep and wool industry has seen her travel to many parts of Australia and abroad. She is excited to spin industry yarns during a period of substantial demand for the sheepmeat and wool industries. Annabelle enjoys horse riding and climbing mountains, and is a lazy supporter of the Geelong Football Club.
