The Australian wool market has suffered large corrections in Week 6. Concerns over global trade tensions, resulted in many major buyers being very cautious in their purchases, this tentative buying approach made it difficult for the market to find a firm level, meaning prices were continually discounted as the series progressed.
This was the first buying and selling opportunity since early July, the national quantity rose to 43,063 bales. With three sales now completed in the 2019/20 selling season, the total national offering has fallen by 27,533 bales when compared to the previous season, a reduction of 20.6%.
From the opening lot in the Eastern markets, it was immediately apparent that buyers were not prepared to buy at the levels achieved before the recess. Prices opened 50 to 60 cents lower but by the end of the series the individual Micron Price Guides (MPGs) had generally fallen by 80 to 180 cents, the Western Region selling last, recorded the largest falls. The drop in the individual MPGs pushed the AWEX Eastern Market Indicator (EMI) down by 78 cents, which closed the week at 1,676 cents. The highest passed in rate in over 10 years of 28.6%, prevented the market from falling further than it did. After starting the new season solidly, where the EMI gained 39 cents, this week’s drop in the EMI has pushed the market into negative territory for the 2019/20 season.
The EMI has fallen 234 cents for the calendar year and is 440 cents below the high it achieved in August last year, an overall reduction of 20.7%. The oddments were the only sector to record positive movement for the series, a limited supply attracted very strong competition, pushing prices up by 50 to 70 cents. This was reflected in the regional carding indicators, which rose by an average of 51 cents.
Auction sales continue next week in Melbourne, Sydney and Fremantle with an estimated 41,566 bales on offer.