Market Updates
AWIS Wool market review - 2nd May 2008
2 May 2008
The Australian wool market continued its downward movement when it finished 1.7% lower, on average, at sales in Sydney, Melbourne and Fremantle this week.
The AWEX EMI fell by 16¢ (-1.7%), ending the week at 904¢/kg. This reflected decreases of 15¢ (-1.6%) in the North and 15¢ (-1.7%) in the South, with their corresponding Regional Indicators finishing the week at 950¢ and 867¢ clean, respectively. The Western Indicator fell by 17¢ (-1.9%), finishing the week at 895¢.
In a two day sale in Sydney and Melbourne, the AWEX EMI fell by 4¢ on Wednesday and by 12¢ on Thursday. The Western Indicator fell by 10¢ on Wednesday and by 7¢ on Thursday in a two day sale in Fremantle.
55,718 bales were on offer, compared with 48,390 bales last week, of which 21.7% were passed in, comprised of 18.5% in Sydney, 19.0% in Melbourne and 30.2% in Fremantle. Pass-in rates for Merino fleece and skirtings were 24.8% and 22.8%, respectively. 2,962 bales (5.0%) were withdrawn prior to sale and re-offered bales made up 13.7% of this week's offering.
The US exchange rate (source RBA) was 1.28¢ lower on Monday when compared last Wednesday's peak of 94.47. It was down by a further 0.13¢ on Tuesday, by 0.19¢ on Wednesday and up by 0.40¢ on Thursday to close at 93.77¢, down 1.20¢ (-1.3%) since the last sale. The exchange rate against the Euro rose by 0.55 Euro cents (+0.9%) to close at 60.00 Euro cents on Thursday night. When looked at in other currencies, the AWEX EMI decreased by 26¢ (-3.0%) in US terms and by 5¢ (-0.9%) in Euro terms when compared with the previous sale.
The market continued its downward movement this week, with growers again reacting strongly by withdrawing 5% of the offering and passing in 21.7% (including 25.0% on Thursday). Demand was again softer, with the lesser quantity of better wools holding on and the lower quality wools again the most affected. Trade members report some Yields were down to 55% and less. There is little demand for such wools in markets like the current one.
Prices were down across all wool types and micron ranges, but more so at the fine and medium end of the market. Average AWEX Micron Price Guides (MPGs) were down by 24¢ for 17.5 microns, by 16¢ for 18.0 microns, by 19¢ for 18.5 microns, by 10¢ for 19.0 microns and by 27¢ for 19.5 microns. The 20.0 micron wool average MPG was down by 24¢ clean, 21.0 microns by 24¢, 22.0 microns by 11¢, 23.0 microns by 5¢, and 24.0 microns by 12¢.
Skirtings were treated similarly to fleece types, with the lesser types experiencing the greatest losses and the better types less affected.
Oddments continued their marked downward movement and the average Merino Cardings MPG easing by a further 17¢. As was the case last week, crossbreds were relatively unaffected, with fine crossbreds down marginally and medium and coarse average MPGs up by 1 to 3¢.
Buyers for China were dominant with a strong presence from buyers for Europe and for India.
Sales will be held in Sydney, Melbourne and Fremantle next week, when 52,287 bales are currently rostered for sale. Present estimates for the following three sales vary from 45,950 to 51,060 bales, a decrease of 6.6% over the four sale period when compared with last year.
In South African sales, the Cape Wools Indicator was down by 6.8% since last sale against a 5.0% appreciation of the Rand against the US Dollar and a 1.9% appreciation against the Euro.
AWTA data for April shows that 6.8% fewer bales 6.3% fewer kilograms of wool were sampled in the July to April period than in the previous year.
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