The Australian wool market has again followed the trend of other global markets, suffering prolonged losses in Week 38.
Melbourne opened in isolation on the first selling day and from the opening lot it was immediately apparent that buyers had significantly reduced their limits. By the end of the first day the individual Micron Price Guides (MPGs) had fallen by 29 to 58 cents.
The AWEX Eastern Market Indicator (EMI) fell by 19 cents. The losses continued into the second day, as buyers continually reduced their buying limits. The MPGs across the country fell by another 26 to 99 cents, the largest losses experienced in Sydney and Fremantle, as these centres came into line with the Melbourne market. On the back of these large losses, the EMI dropped by 52 cents, this was the largest daily fall in the EMI since January.
The market continued to track downward on the final day, but not at the same rate of the previous two days, as buyers became more confident of the new price levels. The Eastern MPGs lost a further 3 to 40 cents, with the EMI falling by 12 cents. The EMI lost 83 cents for the series, closing the week at 1,438 cents. This was the largest weekly fall in the EMI since October last year. The EMI has now fallen for six consecutive selling days, falling by a total of 146 cents over this period.
As the Australian dollar fell to its lowest point in 17 years, the fall in the EMI when viewed in USD terms was more significant, it dropped by 181 USc, a reduction of over 18%. The market did finish on a positive note, the Fremantle region selling last recorded increases in its MPGs on the final day, of between 5 and 35 cents.
Despite the losses, the national offering increases next week to 49,874 bales, with all three centres in operation.