Australian wool auctions kicked upwards this week as some European interest became evident in the sale rooms which provided stiffer competition to the Chinese buyers. This activity centred on better specified wools across almost all microns. Most of the price gains occurred on the initial day of selling followed by a largely consolidating and unchanged market on the final day. 

The Eastern Market Indicator (EMI) appreciated 2.2% to close at 1361ac clean/kg for the week. For only six weeks of the past 17 months has the weekly closing value of the EMI been higher. The Western Market Indicator (WMI) pushed higher again and added 33ac for the week to close at 1389ac clean/kg. 

Significantly though, these AUD gains came about as the AUD forex rates strengthened against all major currencies used in wool buying/trading. This is usually indicative of an underlying strength of demand emanating from off shore, rather than pushed from trader positions. As such, in USD terms, the EMI gains were greater at 3% and finished the weeks at 1005usc clean/kg. 

Merino types led the market rise with general gains of 30 to 40ac recorded. Crossbreds were barely firm whilst cardings sold to the sellers favour.  

Grower sellers seemed to find the prices being offered this week far more amenable and resulted in a clearance rate of 90.9% (79.6% last week) of the Australian wool on offer. Compared to the same point in time of last season, there has been 21.8% or 39,942 more bales sold to the trade. 

Vastly improved demand, price based decisions by growers as well as the higher production levels has led to this expanding sold figure. Using the AUD EMI as a base,  the wool prices are now 58.6% or over 500ac higher than they were  at the corresponding sale week last year. This was the week last year that the EMI bottomed out at 858ac when the pandemic influences on negative consumer purchasing behaviour peaked. 

While not topping buying lists by any means, European interest (away from the consistent buying of crossbreds by Euro’s largest top maker) was very influential in pushing prices higher. Some remarkably higher prices were paid for the few lots of sub 16micron wool available. Gains of over 1200ac were recorded for sub 15micron lots and at least double that for the couple of lots finer than 14micron. The European buying was apparent across most well measured Merino sale lots suiting their more stringent specifications.  

Auction purchasing this week remained dominated by volume by local traders and a large Chinese top maker but all other buying sectors showed good purchase intent. For the first time in many months, the competition could be described as being widespread, but still sporadic by some destinations.

Over 38,500 bales is currently being offered at all three centres for next week.