The market trending dearer came a halt this week at Australian wool auctions. All types and descriptions on offer retreated in price to varying degrees , but it was the finer end of the Merino fleece sector that registered the largest falls of up to 60ac in some cases.  

The Eastern Market Indicator (EMI) closed the week 1.7% or 23ac lower to close at 1319ac clean/kg. With a weakening AUD the USD EMI losses were harder felt at 2.6% or 27usc to settle 1019usc/clean kg.

Pre-sale feelings were initially that the wool market would be quite firm, with a few larger exporters suggesting a dearer market was possible. By Monday afternoon though, it became evident to all that the market was going to suffer a little as the rostered volumes for sale grew rapidly for upcoming auctions. Week 46 was scheduled for 38,655 bales but that expanded to 54,752 bales - a 41% increase in one week. Week 47 has grown 22%. 

The simple matter of numbers of bales affecting markets does not tell the whole story. Additionally, amongst the selection there is a high percentage of wools that are more difficult to place. Higher vm types from this year and low yielding wools from the past seasons that have been held make up a good deal of the offered quantities. As prices for these types backtrack it infects the market with a softer tone and other sectors get dragged down.

With logistical problems widely published, the tying up of buyer finances remain somewhat problematical. The ability of buyers to plan purchasing strategies and execute those plans has become a guessing game, as deliveries can be 2 to 4 week delayed into China and “months” to other destinations.  

The evidence on display is that whilst bale numbers being sold are still high, the trade have absorbed these extra quantities and the price has remained largely buoyant. Some say that wool prices have defied expectations during the entire covid19 influence apart from the sharp drop off in August/Sept of 2020. Even under volume and quality pressures, prices have remained stoic. The competition and eventual export destination is dominantly Chinese with just a smattering of Indian and Euro deliveries being made.

54,752 bales is being offered to sell next week.