Declining wool prices again featured at this week’s Australian wool auctions. All wool types and descriptions were affected to varying degrees, but the finest end of the merino spectrum was again the major casualty as the micron price gaps continue to narrow. 

The slow wool demand activity and price depreciation is relatively expected for this time period of each wool season, with this being the fourth consecutive year a significant price fall has occurred from July through September. This year though, that price degradation situation is being exacerbated by the sluggish- at best-  global economy. Rising inflation and the substantially increased costs of finance, warehousing and logistics has somewhat depleted confidence and hampered the ability of buyers to hold stocks locally for any extended time. 

On the brighter side, production of garments at factories around the world is imminently set to increase to meet the upcoming sales for the Northern Hemisphere winter, and hopefully a better demand situation can arise and assist wool prices  to strengthen locally. Additionally, the year on year auction sale comparisons have seen over 44,000 bales or 15.6%  more wool transferred to trade ownership since the commencement of the new season in July 2022.

Merino wool types finer than 19 micron were a very general 40 to 70ac cheaper this week. The Italian buyer representatives picked off the better types, but appeared to be more selective, allowing a higher than normal percentage of the better specified types to flow into the China top makers inventory. Merino and crossbred wool types broader than 19micron all had losses around the 35ac mark. Cardings held on the best of all wool sectors, with just a small 5ac average price retraction.

The most influential of buyers dominated purchasing this week, with China top makers and woollen manufacturers leading the lists. Trader exporter activity was present, but none of these businesses were showing outward signs of enthusiasm or confidence in the market. Around 37,000 bales are to be offered next week on Wednesday and Thursday.