Global health concerns have impacted the Australian wool market this week. The outbreak of the coronavirus has forced multiple countries to enforce travel restrictions, severely impacting the workforces of many overseas mills. This has created uncertainty among many large importers of Australian wool, which in turn has affected the buying confidence of local exporters.
The lack of buyer confidence was immediately apparent when the markets opened on the East coast. The finer microns were the hardest hit, opening to reductions of 80 to 100 cents when compared to the previous sale. By the end of the day the individual Micron Price Guides (MPGs) across the country had fallen by 29 to 131 cents, 18.0 micron and finer recording the largest losses. The AWEX Eastern Market Indicator (EMI) lost 56 cents for the day, the largest daily fall in the EMI since August last year.
The sharp drop in prices was met with firm seller resistance, the national fleece passed in rate was 48.8%. The drop in the market prompted many sellers to withdraw their wool from sale, nationally 25% of the fleece catalogue was withdrawn prior to sale. The reduction in quantity put extra pressure on the lots remaining, which in turn sparked a recovery.
On the second selling day the market started to recover, recouping some of the losses experienced on the previous day. The MPGs in all three centres added 15 to 65 cents, finishing the series on a positive note. The EMI added 28 cents for the day but still finished in negative territory for the week, falling by 28 cents to close at 1,548 cents.
The skirtings travelled a very similar path to the fleece, large losses on the first day, followed by positive movements on the second, resulting in weekly losses of between 30 and 50 cents.
Next week’s national offering is currently 35,849 bales, with selling in Sydney, Melbourne and Fremantle.