The Australian wool market has continued its sharp decline again this week. 26,420 bales were offered, this was down from the originally rostered figure of 33,046 bales, after 18% was withdrawn prior to sale. Of what was left available to the trade, 34.9% failed to reach seller reserve. Due to the rapid downturn, exporters have been finding it very difficult to trade.
Buyer confidence has been severely dented by the falling market. This series as buyers accumulated wool, they continually reduced their basis. This resulted in the market being unable to find a solid level and prices were consistently reduced as the week progressed. The continual fall in prices pushed the Micron Price Guides (MPGs) generally down between 100 and 170 cents, 18.5 micron and finer were least affected as buyers looked to secure finer wools. The AWEX Eastern Market Indicator (EMI) lost 122 cents for the week, closing at 1,375 cents.
Over the previous four sales the EMI has fallen by a total of 379 cents, a fall of 21.6%. Compared to the corresponding sale of the previous season the EMI has now fallen 715 cents or 34.2%.
The crossbred sector was the best performing sector again this week, although it was unable to record gains, instead it posted general losses of between 5 and 25 cents. The small movement in the crossbreds again prevented the EMI from retreating further than it did. The cardings have also suffered large corrections, Sydney and Melbourne experienced losses of 90 to 140 cents, Fremantle coming back from a one-week break lost over 200 cents. All three Merino Carding Indicators have now lost close to half their value in 12 months.
Due to the current uncertainty in the market, more sellers are adopting a “wait and see” approach, next week’s national offering is currently 29,061 bales, with all three centres in operation.