Forward contract prices from April on show upside for 19 microns

Forward contract prices hold hopes for a price lift, while an agent says growers remain resilient despite the challenges they continue to face.

Wool prices continue to disappoint growers and brokers and now sit at their lowest level in four years.

The Eastern Market Indicator is now at its lowest point since October 2020.

But there is some hope on the horizon, with forward contracts pointing to a lift of 140c/kg on 19 micron wool by next year.

Elders Hamilton district wool manager Andrew Howells said prices were undeniably tough at the moment but there was hope things “could start to turn around from April to December next year”.

He said wool growers who needed to sell now, to assist with feeding costs as the difficult season continued in many key wool growing regions, accepted the market would take a while to improve.

However, rising international shipping costs were also a hurdle.

Mr Howells said there were shortages of containers caused by high demand from US importers trying to transport goods before a potential second Trump presidency, which was expected to lead to higher tariffs.

But, given the market and dry season experienced by many growers, Mr Howells said “people are pretty resilient, given everything that is going on”.

The benchmark Eastern Market Indicator fell 18 cents last week, closing at 1107c/kg. This represents eight consecutive selling days of declines, or a total of 63c/kg.

AWN reported the finer microns have been falling at a greater rate than the broader segments and the differential between microns has retracted.

Last week’s national offering was 31,147 bales, which was 12,550 fewer than week two of the previous season.

According to AWN, buyer activity last week was again described as “cautious from the outset”.

Wool with favourable additional measurement results were better supported, AWN reported, being less affected by the falling market.

This comes as the recent Sheep Producers Intentions Survey from Meat and Livestock Australia and Australian Wool Innovation shows workforce shortages and supply chain pressure continues to hamper the wool industry and many respondents indicated they would consider decreasing their flock.

Meanwhile, a recent Rabobank report found the Eastern Market Indicator finished the financial year up 1.4 per cent on the end of June 2023.

While most microns tracked within a narrow band, 28 micron prices lifted 6 per cent, compared to the end of May and were up 25 per cent on the prices at the end of June 2023. This is one of the few micron categories to be higher than the year-ago price, Rabobank reported.