Week-on-week falls in wool prices

It’s been a tough year for wool growers and the past couple of weeks have seen the market struggle again.

A lift in the production of superfine wool is pushing down Australian prices as the volume struggles to find market share.

The industry’s response to go finer appears to be backfiring with last week’s prices for superfine wool described by one commentator as “very lethargic”.

The benchmark Eastern Market Indicator lost 18c/kg after last week’s sales to close at 1134c/kg and is well down from the 1213c/kg high it hit in January.

And of the 17 selling weeks this calendar year, there have been price falls in 12 of them.

As for superfine prices, the 18-micron southern indicator suffered the biggest price fall of 37c/kg for wool sold at the Melbourne auctions.

Australian Wool Innovation commentary said there was “a lack of regular buying and competition for superfine Merino sector of finer than 18 micron”.

“Prices were again very lethargic in that area,” the commentary said.

“The lack of interest from Europe and India is the obvious missing ingredient at present for healthier sale results for superfine wool, but the production is also getting to be a larger percentage of the clip.

“So far this season, wool finer than 18.5 micron is 34.2 per cent of the entire wool tested during 2023-24.”

WoolProducers Australia president Steve Harrison said growers may not know how much the lower wool returns would affect their profitability.

“They will have budgeted on a good wool price and low interest rates, and I think that only hits home when they sell their wool and get a lower price,” Mr Harrison said.

“There will be some that are holding their wool and I know of one grower who has 700 bales of superfine wool he’s holding onto to try to get higher prices but who knows if that will happen.”

Mr Harrison said the industry was told to chase finer microns and were now seeing the result of this push with extra production.

About 39,000 bales will be sold at auction this week.