Large volumes and foreign exchange rates conspired against wool prices this week at the Australian wool auctions. Increases in wool value, in all currencies were recorded, except for the most important for Australian woolgrowers - the AUD. The most significant forex appreciation was seen on the Euro v AUD, as an almost 3% gain on forex alone had the active European operators revaluing their buying levels. The one millionth Australian bale of the season was sold this week compared to that figure being reached week 38 last season

In the dominant USD and CNY trading rates, a 1.5% gain on both against the AUD saw opportunities for local gains evaporate. In all instances, if rates of exchange had remained similar, the market would have seen AUD levels better, indicative of the stronger demand that exporters are reporting.

As a result, the Eastern Market Indicator (EMI) finished 14ac lower this week to close selling at 1407ac/clean kg. A higher passed in rate revealed the preparedness of grower sellers to hold if price expectations were not met. The Western Market Indicator (WMI) dropped 15ac to 1444ac/clean kg and just 84.7% cleared to the trade. In USD terms the EMI gained 4usc or 0.4% to round out the week at 1027 usc/clean kg.

Logistics issues continue to hamper the “normal” trading of wool with shipping delays and hence payment delays  obstructing full operations of all participants each week. In a positive, many key buyer exporters are commenting of how well the market has held on in their opinion, given those abnormal problems and the relentless 50,000 bale weekly offerings. 

Over in South Africa, due to similar logistical problems, the wool industry decided to halt auction sales for a week back in mid February in an attempt to help recoup exporter finances and assist shipments, allowing auctions to be given some chance of shaking off those outside shipping and financial influences. 8,000 bales was due to be sold that week.

There is over 52,000 bales rostered to sell again next week with Wednesday and Thursday two days of auctions.