Wool market analysis
The wool market has been very positive over recent weeks, with some good steady rises evident. Elders Darkan district wool manager Sarah Buscumb shares her views on the current market.
This week is the third last week of wool sales before a three-week recess. The market has started to soften in the first day of sales, indicating a slight correction.
In the new financial year we are anticipating a very large offering of wool that had been held over due to tax planning decisions made by growers. The current national estimate for sale 01, held in the first week of July is 56,004 bales on offer, followed by 43,142 bales in the final sale of the winter season before the break.The auction market is tracking along well depsite a fall in forward market bids.
Carding wool has been gradually increasing in value in the Australian market for the past six weeks. This indicates these wools would be better going through the auction market as opposed to be sold in the shed to private buyers if growers have lines or bales that could be inter-lotted. A lot of growers had sold off carding and oddment lines earlier, and just held onto fleece lines, which would be contributing the strong market for these types at present.
Merino wool has been returning good prices for growers, and is not too expensive for retailers. As a result people quite optimistic about the coming selling season, although there is still trouble in the supply chains getting products moved. Currently it can take up to a month to get space on a vessel once booked, and unless it is going direct, can take twice the normal duration time to ship. There is no light at the end of the tunnel with this issue.
Prices for the very fine Merinos continue to rise. It seems the finer AWEX MPGs are headed back to their 2018 highs, although this time with big micron premiums as opposed to 2018 when micron premiums were relatively small.
Increased supply looks to be holding the broader Merino category prices back. Reports state that the Chinese economy is still on track to slow later in 2021, which may indicate price weakness for greasy wool in the spring, a normal seasonal pattern.
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