Wool confidence surges as Aussie dollar weakens

Written by admin on 10/07/2018 Categories: 南京夜网

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THE wool auctions recorded the largest national weekly offering in more than five years, with close to 60,000 bales offered last week.

Industry sources reported the market held its strong position and finished the week 10 to 25 cents a kilogram higher across the board.

The Eastern Market Indicator (EMI) gained 14c/kg to reach a five-month high of 1295c/kg.

The Australian Wool Innovation wool report said with the general global financial woes, the Australian wool market was in a “positive mood”.

“The market seems to have a habit of resisting the trajectory and severity of reactions of the major traded financial and commodity products,” an AWI spokesman said.

“While exporters approached the week with some trepidation given the large volume available, confidence grew as the week progressed, and nearly all wool types and descriptions on offer posted gains for the series.”

According to the AWI report, current values in Australian dollar terms were 23 per cent higher than for the same period last year, while the EMI expressed in US dollars was US47c/kg better.

Moses and Son director Marty Moses, Temora, said these figures were a great indication for the wool market coming into the new year which was always an anxious period for growers and brokers.

“We went into the Christmas break with two positive sales,” Mr Moses said.

“And it is always apprehensive in the new year.”

But the current market should give confidence to wool growers, according to Monaro-based wool broker Gordon Litchfield.

Gordon Litchfield Wool Pty Ltd principal GordonLitchfield said the market was “pretty healthy”.

“The pass in rate was only about three per cent on the large volume and it probably shows there is not a lot of volume around,” he said.

Mr Moses said current prices were “fantastic returns for growers.”

“Quality wool is in strong demand,” he said.

“But prem-shorn wool and cardings, both Merino and crossbred, are possibly at an ‘all-time’ high reflecting increased demand for the new fashions coming out of China.”

Mr Moses said the new “active wear” garments were attracting a bigger share of the market, with wool becoming the fibre of choice for these products.

Mr Litchfield also confirmed values for cardings and short wools were at a record level.

The Mercado market analysis report last week said “the discounts of cardings over combing wools are at an historically small levels, which suggests support for Merino fleece wools if carding prices are sustained at these levels”.

The other positive factor commented on by brokers and analysts alike was the relative weakness of the Australian dollar against the US.

“This makes wool more affordable to importers while giving an edge to prices in Australian dollar terms,” Mecardo said.

Mr Litchfield said “basically the wool market was bucking the trend” with other commodities entering a period of subdued demand.

But he urged caution despite the current positive situation for wool growers.

“Global economic concerns, currency fluctuations and a dropping oil price, are signals to be wary off,” Mr Litchfield said.

Mr Moses was also wary, saying there could be some demand restraint in the next two to three months due to international credit restrictions.

Meanwhile, Mr Litchfield reports a sale of a 100 bale clip, grown on the Monaro and measuring 19 microns, but including pieces and some cross-bred wool which averaged $2108 a bale.

“It is a positive situation for woolgrowers,” he said.

This story Administrator ready to work first appeared on Nanjing Night Net.

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