Wool prices a big positive
After a volatile year in 2020, the wool market has rebounded strongly.
From the very first sale of 2021, wool prices have been on a steady incline, with all micron types enjoying some form of rise.
The first sale back from the Christmas recess saw the Eastern Market Indicator sitting at 1172 cents a kilogram clean, while the Western Market Indicator was at 1222c/kg.
At the completion of our most recent selling week (commencing 24 May), the EMI had posted 1320c/kg and the WMI was ticking along nicely at 1360c/kg.
Despite some dips over the past month in the market, there have been few complaints about current levels and the finer end has been performing particularly strongly.
In the period since the first sale of the year, the indicator for 18-micron wool in WA was 1627c/kg. Following the 24 May selling series, it was sitting at a healthy 1952c/kg.
Similar levels have been gained in the 19-micron space, with 1496c/kg on 14 January, as opposed to 1631c/kg currently.
This rebound has been particularly positive considering some of the challenges the industry has faced in recent months.
Obviously, the global pandemic continues to impact many areas of the world, and we have also seen shipping challenges, a strong Aussie dollar and much larger wool volumes.
So far this selling year, 200,000 more bales have been offered at auction compared to this time last year.
These challenges would normally test the wool market to a large degree, so the level of steady gains each week is even more pleasing.
This positivity means wool that have been sitting on hold or in farm sheds for a long time are being offered and sold as growers look to take advantage of good prices.
In the medium to long term, there is also a positive outlook for the fibre. As Covid vaccines are rolled out across the globe and restrictions start to ease, we hopefully will see consumers come out with an increased appetite to spend.
This could augur well for retail markets and for products like wool.
Article written by Elders Albany district wool manager Travis King.
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