Australian wool auctions commenced this week following the three-week annual recess and price falls across all wool types and descriptions resulted. The markets were predicted to struggle to hold onto the established values and that situation arose from the opening lot as many buyers were showing hesitancy to even place bids. The finer end on the Merino fleece and skirtings sector incurred the largest losses and in many cases the depreciation was well over the 100ac clean mark.

The Eastern Market Indicator (EMI) opened the “new selling season”  56ac or 3.92% lower to close the first week at 1372ac clean/kg.  Comparisons of pre and post recess currency rates against the AUD showed 1% lower values and this would theoretically be of help to local AUD prices, but in reality it pushed the losses higher in off-shore currencies. In USD terms, the falls were of a 5.1% or 55usc magnitude which saw the USD close at 1010usc clean/kg.  The WMI (Western Market Indicator) fell 56ac lower  to 1406ac clean/kg.

Demand from China was poor in comparison to the pre recess sentiment, but other origins such as India, Italy and the Czech republic showed a similar support of the market that was apparent pre recess. Interest from Chinese first stage processors was lukewarm at best and some usually influential pur-chasers were noticeable by their absence or weaker than normal buying in-tent. Worries surrounding a reported increase in Covid issues within China were mentioned as dampening demand but the ability to move product fur-ther up the chain is proving the current hurdle to jump.

Very high passed in rates were a feature of the week’s auction activity as grower sellers resisted the lower prices being offered. This strong willingness to hold onto product assisted prices falling even lower as a third of all wool offered failed to meet reserves during the week, and within that, around 40% of all Merino fleece and skirtings was not sold.

Merino fleece and skirtings finer than 18.5micron fell 80 to 130ac, and broader than that dropped 35 to 70ac. All better wools were at the lower end of those falls with some better super fine types just 30ac lower as Italy competed strongly. Cardings and crossbreds generally 30ac cheaper.

41,000 bales is rostered for auction next week.