‘We hope it could be the start of climbing out of this hole we’re in’

Last week saw price hikes across most wool types, as woolbrokers say it could be indicative of better rewards for growers this winter.

Woolbuyers are determined to fulfil orders with most wool indicators on the rise, but the market is yet to “climb out of the hole”, one broker says.

Australian Wool Innovation’s weekly report showed local prices increased 1.2 per cent last week, as trader buyers were heavy bidders.

China and India had volume orders for top-end wools, which settled between 50-80c/kg dearer and were typically finer than 17.5 micron. Other Merino wools and crossbred wool types were 15-25c/kg dearer.

Sheep flock. Picture: Zoe Phillips

Wool Solutions director Rob Calvert said fresh export business, combined with a small national offering led to the better market. But he said it was “too early to call” a positive trend in the wool market.

“As of today there has been reports of further business done, not huge quantities but more fresh sales done late this week,” he said.

“As an industry we’re waiting for some direction, and unfortunately one week doesn’t make a trend, and two weeks doesn’t make a trend. We want to see three to four weeks of positivity to get some momentum.

“We hope it could be the start of climbing out of this hole we’re in.”

Although most wooltypes experienced a rise, the Merino carding indicator had a 28c/kg drop in Melbourne.

Mr Calvert said another smaller national offering this week, 28,000 bales, would likely lead to similar prices.

He said the price rise had come off a low base, and the market had underperformed this year so far.

“Since January, the market has mirrored the currency. The US dollar goes up, the wool market has gone down and vice versa, and we’ve moved sideways,” he said.

Fox and Lillie brokerage and wool technical manager Eamon Timms said the season led to low-yielding wool on offer, but avoided last month’s discount levels.

“The lack of volume will probably be a driver for the market, to be well-maintained and have some gain in the coming month,” he said.

“Sometimes if the volumes are quite light, it makes exporters more hesitant to sell in case they have difficulty covering their commitments. Small volume doesn’t always equate to the market moving up.”