Wool market: Eastern Market Indicator hits six-month high

The EMI indicator is sitting at its highest level in six months but what does the new year mean for the wool selling season?

The Eastern Market Indicator finished at 1389c/kg - a six month high for the wool market in the first week of sales in the new year. Picture: Andy Rogers.

The wool market opened the year on a high.

The Eastern Market Indicator rose 31c/kg, to 1389c/kg, its highest level in six months in the first week of the new selling year.

And the outlook will remain positive if weekly offerings steady, according to Matt Tattersall, Elders Wool technical co-ordinator and auctioneer at the Melbourne selling centre.

“At the moment there’s no real known reason or concern that could cause the market to fall back,” he said.

“In the first week back we were actually anticipating a larger volume than what we had offered, but we have found a lot of shearing has been delayed because of wet weather or staffing shortages.

Mr Tattersall said keeping weekly bale offerings steady would be the key to steadying the market and preventing price drops due to a larger volume of wool on offer.

Nationally, 43,739 bales went under the hammer last week, well below the more than 50,000 bales offered at the opening sale last year.

Mr Tattersall said offerings of about 40,000 to 45,000 bales were well received and easy to absorb by the market.

“If you throw a three-day selling week out of nowhere it doesn’t take much to scare the exporters and the processors over in China because they think they can haggle the prices down a bit more with the extra wool,” he said.

Fox and Lillie national wool brokerage manager Eamon Timms said “it’s been a very good start to the calendar year”.

“There was some good inquiry on the Merino front over the off season and that gave some extra confidence when the market started,” he said.

Mr Timms said while the effect on the market of the most recent wave of Covid-19 had been minimal, there had been some evidence of a retail slowdown of the domestic market in China in the couple of months leading up to Christmas.

“This is the time to sell winter garments in China and there hasn’t been the same amount of interest there would normally be,” he said.

A report from the National Council Wool Selling Brokers Australia showed the lift in the wool market was consistent with the performance of other commodity markets over the new year period. Crude oil and iron ore prices are up about 15 per cent since mid-December while cotton prices have firmed 6 per cent.