Wool improves as crossbred market hits record levels

Wool prices on the improve


News
Wool market has headed back into positive territory in the last two weeks with the EMI making a steady rise.

Wool market has headed back into positive territory in the last two weeks with the EMI making a steady rise.

Aa

Wool market back on an upwards trend and it is crossbred wools that are still leading the way.

Aa

After a run of losses, Australia's wool market is tracking in an upwards direction with positive price gains across the entire offering.

The AWEX Eastern Market Indicator (EMI) finished 17 cents higher for the week, closing at 1960c per kilogram.

The recent trend of buyer interest on the better style wools continued which helped to push prices up by 15 to 30 cents across all microns.

But according to AWEX senior market analyst Lionel Plunkett, it is the crossbred market that has a life of it's own.

Crossbred wools, or 28 to 30-micron fleeces hit record levels, rising 40 to 60c, pushing the individual Micron Price Guide (MPG) for 28-micron further into record territory in both Sydney and Melbourne.

"Reportedly, a lot of this wool is going into the 'fake fur' market - something that is quite ironic, a natural product like wool going into something that is actually fake," Mr Plunkett said.

"It's a bit like the carding market, that doubled-faced market that kicked that whole carding sector 12-months to two years ago when it was driven by demand by a certain fashion trend.

"That sort of trend is now gradually dissipating so it will be interesting to see how long the fake fur trend stays in place.

"It has risen strongly, but who knows if it is about to turn or it could go on for another 12 months."

Mr Plunkett said there is distinct disconnect with the Merino market.

"Generally the Merino and crossbred market travel in reasonable sync, but this time around the crossbred market has a life of it's own," he said.

According to industry experts, the currency movement, which in US dollars fell by 21c, also played a part in the Australian EMI rise.

Executive Director, National Council of Wool Selling Brokers of Australia, Chris Wilcox, said the movements in prices were strongly influenced by the 2.5 per cent change in the US exchange rate since the last day of selling prior to Easter.

"The closing US exchange rate was at an 11-week high on that day," Mr Wilcox said.

"While Thursday's closing rate was the lowest so far this season. The net result was that the closing EMI in Australian dollars was the highest since it reached 1963c in week 38."

Due to the week-long Easter break, quantities increased with 43, 053 bales offered last week with just 6.4 per cent passed in.

But a cloud of concern of supply still weighs over buyer's minds in the short-term and into 2020.

This week the national quantity is down to 33,464 bales with a further decrease expected in the following weeks.

According to the AWEX report brokers are reporting a large drop in shearing activity, as many farmers begin their annual cropping programs.

"The predicted drop in fresh wool being available has been reflected in the AWEX four week forecast (FWF) issued last week," Mr Plunkett said.

"Shearing activity and sale activity does drop around this time of year, every year, post Easter.

"Although that is for a variety of factors, it does fit in cropping schedules, especially in the west, and other things going on in farming enterprises."

Figures show that week 45 and 46 will have less than 35,000 bales and week 47 has less than 31,000 bales nationally.

South African sales remain at a halt

With the ban on exports to China still in place, there were still no wool sales in South Africa.

Mr Wilcox said advice from South Africa is that a submission will be made on the OIE seeking a declaration of FMD-Free status for areas outside the FMD containment zone.

The story Wool improves as crossbred market hits record levels first appeared on Farm Online.

Aa

From the front page

Sponsored by