AWI Commentary wool sales 25 February 2021
A rather unique week at Australian wool auctions whereby the Australian dollar prices faltered but the US dollar prices kicked up. This was almost wholly due to the foreign exchange (forex) rate moving 2.8% stronger. With the resulting weaker Merino fleece prices, the passed in rates soared to over 18% with grower sellers unwilling to accept the lower prices on offer. Over 50,000 bales were offered and this made it easier for buyers to be more selective in their purchasing.
The Eastern Market Indicator (EMI) closed the week 12ac or 0.9% lower to close out the week at 1306ac clean/kg. The gains on the USD EMI were 1.85% or 19usc clean/kg to 1041usc clean/kg.
Financial restraints on exporters, coupled with delayed and longer lag times for shipping have played their part on the market advance being shelved for the time being. Buyers are reporting an additional 12 days waiting time above normal on average for payments to be received and delivery being made into the Chinese main ports. Shipping companies and stevedores are under siege trying to cope with the heavy sea traffic at the moment. Up to 3 days additional are now required just for local loading as ports are inundated with work and problems surrounding the storage of the empty containers.
As the prices are largely acceptable for most grower sellers at the moment, volumes at auction have steadily risen with the freshly shorn clip being supplemented by a good portion of “held” wools. The coming weeks sales are a good example as last Friday 39,000 bales had been scheduled, but by Monday 12pm that figure had escalated to almost 49,000 bales – which was a 26% increase just over the weekend.
Trading companies again dominated this weeks’ buying as top makers generally stepped away from the market. Merino fleece and skirts dropped 20 to 40ac. Cardings were 10 to 20ac lower but crossbreds fared better to be 20 to 30ac dearer for the week.
Over 50,000 bales is scheduled and held wool augments the offering.