Prices at the Australian wool auctions added a few cents for the week, but a healthy foreign exchange (forex) advantage and a significant reduction in eventual volumes at sales rostrums were largely responsible. In all other currencies used in wool trading, prices fell by 2 to 3%, which reflects the slowing of current enquiry from overseas.

The Eastern Market Indicator (EMI) closed the week 8ac higher to close at 1285ac clean/kg. On top of the drastic 2.9 percent drop in the AUD/USD rate, the USD EMI shifted downward to the order of 2.3% or 23usc to 977usc clean/kg. A good result for all, as for our exports we received a handy rise locally and our global trading partners are the recipients of a cheaper buy-in price for orders.

Despite wool prices now performing relatively well in the light of reduced consumer access to wool, there has arisen a single issue that may hamper recovery attempts for the price of wool to proceed to higher levels of return; the ongoing and seemingly worsening logistics issues. 

Delays in shipments are verging on chronic, with exporters receiving multiple cancellations of sailings which leads to weeks, and in some instances, a month of hold-ups, tying up valuable finances. Reports indicate the notice time is extraordinarily short with wool dumped and ready at port being jettisoned off delivery and a new schedule “subject to change” being issued. Some exporter’s containers have been canned three times and are still awaiting discharge. 

The shipping disruption obviously effects the main export destination of China but harder impacts are being felt upon the Indian and European importers. Available vessels setting sail for those nations are much scarcer and also the space available on those limited vessels is ever tightening. As the market has shown, when those nations are in the room competing, the wool price is the beneficiary of that additional bidding. 

Superfine (less than 18.5mic) merino fleece and skirtings were the most well sought and gained 30 to 40ac for the week. All other types and descriptions traded around the established levels.

49,000 bales is scheduled to sell at next weeks’ auctions.