Week 07 – August 2022

The continuing influence that foreign exchange (forex) rates have on spot wool prices was highlighted again at this week’s Australian wool auctions. Markets traded to a firm-unchanged basis throughout the week. Just a few minor movements on individual type quotations occurred as most bid prices were being accepted at auction, leading to the substantially better clearance rate of 90%.

As sales were conducted, most of the live forex rates remained at similar levels, leading to a welcome stability in trading as opposed to the previous week’s changing pricing factors. Such radical and swift changes to trading conditions impacts on the low-risk minimal-movement environment that would normally see wool move smoothly and relatively price predictably through our exporter’s hands.

During Thursday’s trading however, a large drop in the AUD against the major trading currencies occurred. By this time almost all wool had been transacted for the week. This meant any advantage from the 2% cheapening of the AUD value against the USD was unable to be utilised by buyers.

This week saw a few clips coming through of the new season’s super fine and ultra fine speciality Merino types. Most of these wools were exceptional in quality and had mainly the Italian buyer representatives competing fiercely for the few bales on offer. Prices were in premium territory with early indications putting these fleece wool lots at a 300 – 400ac/clean kg premium above the published MPG range.

WA was the standout centre for prices achieved, with all types and descriptions posting gains. In fact, whilst the EMI remained unchanged at 1342c/kg, the Western indicator advanced 10ac to 1459c/kg.

National buyers lists had Australia’s largest trader at the top but strong support came from China’s two largest top making companies and other trading exporters. Chinese indents were active, but not as strong as normal. Local manufacturers led the purchasing interest in carding types

Next week sees a two-day sale series Tues/Wed featuring just Melbourne and Sydney as Fremantle sits out their annually scheduled non sale week. Despite this, there will be a touch over 40,000 bales offered for the week.