Australian forecasting committee – 29 April

The Australian Wool Production Forecasting Committee will meet in a digital Meeting on Wednesday. The State Committees met last week. The current forecast for 2019/20 is for 272 mkg, 9.2% (28 mkg) less than in 2018/19. The 2018/19 figure of 300 mkg was down by 41 mkg (-12.1%) from 2017/18.

The updated forecast will be available on Friday. Key data available to the Committee includes:

* AWTA tested 5.9% less bales (5.5% less weight) in the nine months to the end of March. This figure had moved to 6.2% less bales (5.8% less weight) on 24 April.

* AWEX data indicates that 14.3% fewer first-time bales had been offered to Sale 43, which is significantly different to the AWTA Year-to- Year change of -6.2%. This difference appears to be largely due to the greater number of bales Withdrawn Prior to Sale this season (10.6%) compared with the full season numbers of 3.7% last year and 2.0% in the year before. The current season number was even higher at 18.6% over the last four sales.

The AWEX EMI finished at 1272¢, 20¢ lower (-1.5%) in Australian currency and 21¢ lower (-2.5%) in US currency at sales in Sydney, Melbourne and Fremantle in Week 43.

24,974 bales were on offer nationally, compared with 18,097 bales last sale. 15.2% of the offering was passed in after 17.5% of the potential offering had been withdrawn prior to sale. 21,187 bales were sold.

AWEX reports that the value of the wool sold was $28.7 million ($1,355 per bale), taking the season total to $1.732 billion ($1,674 per bale). The number of bales sold at auction this season is now 18.0% less than in 2018/19.

There was a familiar pattern of a high Withdrawn Rate prior to sale and a high Passed-In Rate as sellers were not prepared to sell in the current market conditions. This was less pronounced among the Skirting types which had lower Withdrawn and Pass-In Rates than those for Fleece types.

Falls in the AWEX Merino Micron price Guides were less than those for Crossbreds; and were least at the fine end within the Merinos.

The US Exchange Rate finished 0.61¢ (-1.0%) lower to close at 63.23¢ on Wednesday.

Demand was dominated by China with Italy and India in lockdown.

In other countries, South Africa held its first sale since 19 March when the Cape Wools Indicator was up by 6.4% against a 9.8% depreciation of the Rand against the US Dollar and a 9.5% depreciation against the Euro. The way has been cleared for the resumption of sales in New Zealand with the move from Stage 4 to Stage 3 restrictions at mid-night on Monday.

Looking ahead, offerings for the coming three sales are expected to range from 25,554 bales to 30,986 bales and to be 20.6% less than in the same period last year.

Source: AWI