Rates for the sustainable fibre are at financial-year highs
Luxury products like Merino wool and fine wines are getting a boost from a fall in the Australian currency against the US dollar. It comes as producer sentiment lifts.
Wool prices are the best they have been all financial year, but producers have been cautioned a falling Aussie dollar is the main driver.
According to AWN, the market lift was led by a rise in Merino fleece returns.
The Eastern Market Indicator is now at its highest point since the end of June and the highest it has been for the entire 2024-25 season.
However, a softening in the crossbred prices stemmed a larger rise on the indicators.
The EMI closed last week seven cents up at 1144c/kg. Brokers are quick to point out the improved market was largely due to currency movements with the Australian dollar falling to its lowest level since August.
However, this might be good news for Australia’s luxury products.
Mecardo market insights lead Olivia Agar said “we know wool has been in a down cycle for most of this year”. “The good news is that part of the cycle seems to be over”.
Mecardo tracks other commodities, which it terms as “luxury” items, including fine wine.
Ms Agar said this category and wool tended to trend together in US Dollar terms.
The fast rate of decline in fine wine prices was slowing, she said. This was good news for wool and indicated there may be a more sustained uplift in other luxury segments, including wool.
At the top end, Nutrien reported that last week TA Field Estates achieved a whopping, seasonal record price of 27,018 and 26,385 c/kg clean for two lines of weaner wool, measuring 12.8 and 12.9 micron.
But, Ms Agar said a sustained price recovery hinged on an insecure global trade environment and the fortunes of major economies including China, Europe and Japan.
“When viewed in US Dollar terms, the EMI slipped 1c/kg to 741c/kg US,” Ms Agar said.
AWN wool specialist Andrew Holgate said, following last week’s sales, that wool with lower tensile strength, and higher vegetable matter, also sold to discounted rates.
Meanwhile, the latest survey of Australian sheep producers shows a dramatic improvement in confidence, on the back of better returns. The Sheep Producer Intentions Survey found sentiment lifted from -42 points in October 2023, to +42 points 12 months on.
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