Although the Australian wool market took a small step back last week, it was a steadier week in terms of the recent erratic movements in the wool market.
The Eastern Market Indicator (EMI) dropped by 2.5 per cent, or 30 cents, closing the week at 1159c/kg clean.
The national offering also fell, reduced to 36,332 bales after growers became aware of the weaker demand and withdrew 7.1pc of the selection prior to the sale.
With 29,171 bales sold, almost 4000 fewer than last week, the pass-in rate lifted to 19.7pc nationally.
According to the AWEX weekly report, compared to the corresponding sale of the previous season, there has been 10,593 fewer bales put through the auction system, a 1.8pc reduction.
But as the steadier pattern emerges, hopes of a more stabilised market are gathering momentum with consumer confidence in major wool consuming countries lifting.
According to Chris Wilcox, Executive Director The National Council of Wool Selling Brokers of Australia, the industry is about to enter a critical period for sales of wool clothing as the Northern Hemisphere enters the second month of the autumn/winter retail season.
"Given what has happened this year with the toll of COVID-19 and the associated restrictions and now the second wave of infections rising in Europe, the US and, to a lesser extent, Japan, it is time to take stock on how consumer confidence and retail sales are shaping up in the major wool consuming countries in the Northern Hemisphere," Mr Wilcox said.
However, he said consumer confidence in the major wool consuming countries has mostly recovered from the initial hit earlier this year caused by the COVID 19 pandemic.
"Consumer confidence fell off a cliff in most countries with the exception of China, where consumer confidence dipped but did not slump like elsewhere," he said.
"The US, Korea, Japan and the EU have all seen a solid recovery since May, although it has been volatile in the US and dipped in the EU in October."
Mr Wilcox said the decline shows no sign of abating in the UK, while retail sales in France and Italy appear to have bottomed out.
"There are some tentative signs of improvement in the US, China, Japan and South Korea," he said.
"Despite an improvement, the growth rate of retail sales of clothing in China, the world's largest retail consumer of wool clothing is still negative on a 12-month moving average basis."
A positive is that one of the major shopping events in China (and increasingly being adopted around the world), Single's Day, on November 11, broke sales records for the major retail trading platforms, including JD.com and Alibaba.
Mr Wilcox said this provides hope that the recent moderate improvement in clothing retail sales in China is starting to gather momentum.
According to AWI CEO, Stuart McCullough, who addressed the current state of the wool industry at the recent AWI AGM, with the market experiencing some type of recovery in the last month, the outlook is looking more promising.
"In terms of major economies to recover from the disruption due to Covid-19, China is the clubhouse leader by a long way," he said.
"We are making the most of that with our current marketing campaign which is creating demand for wool and importantly leading to extra sales."
According to Mr Wilcox, if the tentative signs of recovery of retail sales can continue in the autumn/winter season this will help boost confidence amongst wool textile businesses.
