Australian wool auctions could not sustain the fifth consecutive weekly series of gains produced since early December and a generally softer tone was set at sale rooms this week. A combination of factors conspired against the trend of higher prices and a generally cheaper market of around two per cent resulted. All types and descriptions - except for the merino carding sector and the best 18.0 micron and finer  fleece types - were affected. 

The Eastern Market Indicator (EMI) finished 1.9% or 27ac lower this week at  1422ac/clean kg. The Western Market Indicator (WMI) concluded the selling week 49ac lower at 1443ac/clean kg. In USD terms the EMI held up much better due to forex gains of the AUD but still recorded a 13usc or 1.2% depreciation to 1019 usc/clean kg, albeit a level  the second best since July 2021.

Although demand remains reasonably good and more consistent, wool prices came under pressure this week due to logistics factors. Port congestion and transport problems are causing  shipping delays of up to a month now. This places pressure on buyer finances as most overseas payments to buyers are paid by an irrevocable letter of credit (L/C) which is executed to the bill of lading (B/L) date. That leaves buyers awaiting payment longer and in some instances prevents them participating fully at auction due to the prompt payment of auction purchases being mostly due in just one week. 

Alongside finance issues, the large volumes that are normal for this time of the season are also preventing prices rising further or even holding for the time being. The number of exporters trading wool is also lower than last year, with one significant global player not operating. The absence of this exporter takes away a bidder that has usually financed auction purchases within the offered volumes. 

Merino fleece prices were primarily responsible for the overall deductions although the better sub 18 micron types did hold their values. Falls of 40 to 60ac were common on Merino wools. Crossbred types saw their values 20ac lower, the 21 per cent pass in rate was therefore no surprise . Cardings resisted falls and added 5 to 15ac.

Next week has 56,000 bales for a Tuesday through Thursday schedule.