Prices rises and increased sales in first wool market for year

Sales of more than 50,000 bales of wool could have tested prices but there were some surprises in the year’s first auctions.

The wool market clawed back some of the losses of last year on the back of increased demand in the first sales after the Christmas break.

The benchmark Eastern Market Indicator closed last week at 1333c/kg, and despite the more than 50,000 bales being offered, the pass-in rate was less than 12 per cent.

While the EMI’s rise of 6c/kg was modest in $A terms, it was 17c/kg dearer or a lift of almost 2 per cent in $US terms.

Demand built through the week, with the finest end showing the greatest lifts for lines under 18 micron.

In its weekly analysis of the market, Australian Wool Innovation said there had been signs the market could open stronger, with sales of stocks during the three-week auction recess.

“Those that had the stocks on hand were freely able to dispose of them at reasonably advantageous prices,” the AWI spokesman said.

“Given the tight business conditions over the previous first half of the season, some sales were made with balances left to buy, which was a sign of exporters willing to sell forward into the expected larger offerings of January and February.”

Last week’s sales saw some individual lots rise by up to 100c/kg for high-quality lines under 18 micron.

But it is not only the top quality which is gaining ground, with stronger demand from China shown late last year for Merino fleece and skirting wools repeated at last week’s sales.

“The stronger demand from China that appeared in December 2022 for Merino

fleece and skirting wools was very much apparent this week,” the AWI spokesman said.

“The skirting types performed the best and were consistently 40-50c/kg dearer.”

Chinese orders were stronger at last week’s sales, and underpinned sales, but interest from major exporters and local first-stage manufacturers was evident across all segments, AWI said.

Another 51,000 bales are rostered to be sold this week.