Wool producers wary prices may plunge further amid coronavirus uncertainty
Wool’s downward price spiral is showing no signs of abating, with the Eastern Market Indicator plummeting yet again. As wary producers consider how to approach looming sales, here is the state of play.
UPDATE: The Eastern Market lost 46c/kg overnight as coronavirus volitility continues to wreak havoc with the global wool market.
And prices could soften further this week, with some producers feeling wary of the market.
The EMI finished trading at 883c/kg, down on the 929c/kg recorded last week.
Most micron categories were losing value last week as ongoing coronavirus uncertainty dampens global demand for wool.
The number of bales offered last week dropped to 20,488 bales nationally compared to the 31,394 the week prior.
An Australian Wool Industries Secretariat report showed 11.2 per cent of the offering was passed in, with the EMI falling on both days of sales last week.
Fox and Lillie wool brokerage manager Eamon Timms, speaking to The Weekly Times prior to Tuesday’s wool auction, said he anticipated sales would maintain recent price trends this week.
“It will be a down week this week, unfortunately. There was a little bit of business at the end of last week, but not a lot of volume,” Mr Timms said.
“The levels you can do business at were under where the market closed. Also the Australian dollar keeps rising as the US dollar falls, and that’s putting enormous pressure on the price.
“The Chinese have not lifted their prices in US cents.”
Mr Timms said market conditions were generating a mix of responses from producers offering bales at auction this week.
“Certainly the EMI could soften, with the majority of micron categories falling that will drag the indicator back,” Mr Timms said.
“There are a range of responses, some people are hoping for better later and are holding back. Others are resigned to the fact this global financial problem of COVID-19 is going to be here for a while.”
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