All types and descriptions came under heavy buying pressure this week at the Australian wool auctions. Price gains to the order of 25 to 40ac clean kg were recorded by the close of selling. The EMI (eastern market indicator) pushed 32ac or 3.7% higher to 890ac cln/kg, whilst the USD EMI gained 12usc or 1.8% to 643 usc cln/kg as the more advantageous forex (foreign exchange) rate dampened further rises in that currency helping the overseas buyers stay in the market.

Stimulus for the appreciating market came almost exclusively from genuine demand from the Chinese manufacturing sector. Relatively widespread enquiry late last week had reportedly been converted into new business for traders and the delivery period pretty tight, so inroads into covering those contracts had to be made.  

Exporters facing harder and leaner times need to cover off risk quickly to maintain the funding of overheads in this period of diminished opportunities of trade whilst attempting profitable conclusions to those limited firm orders available currently. Last weeks business was the first real options to arise for the best part of two months so the pencils were sharpened and new contracts written.

This new business coincided  with a sale week that had only small volumes available of less than 20,000 bales nationally. Auction activity pressure was transferred to the buyer side and prices turned to the positive. The weaker AUD against the USD helped the local auction price as that rate dropped almost 2% week on week. Stiff competition ensued across all three selling centres but also the willingness of grower sellers to keep moving wool through the chain was highlighted with the 94% clearance rate at auction. 

Merino fleece, skirtings and crossbred types all showed consistent price rises of 25 to 40ac per clean kg for the week. No type group was spared. Carding and oddment wools did enjoy gains, but these were to the order of just 5 to 10ac. Local traders were dominant, with the Chinese indents and top maker buying strength subdued at best and seemingly concentrating their attention towards the lower types.

Next week has all three Australian centres offering just over 33,000 bales.