Wool prices have gained ground over eight days of selling

Processors are driving demand as wool lifts, including against the US currency, prompting hope amongst long suffering growers.

The Carter family from Wallaloo Park, at Marnoo. Picture: Zoe Phillips

Larger volumes to be offered at wool auctions are not expected to lead to a drop in prices this week as the market appears to, finally, be on a long-awaited roll.

With eight days straight of gains under its belt – the longest upward momentum for three years – sentiment in the wool market is lifting.

But brokers caution the demand driver was processors, not retailers, with those businesses needing to retain volume through plants amid smaller offerings.

The Eastern Market Indicator rose 17c/kg clean in the past week’s selling, to be at 1242c/kg going into this week’s auctions.

The greatest improvements has been in the 18 microns category, up 30c/kg.

This comes as a large offering is expected this week, with 41,064 bales for sale, compared with 38,246 last week.

But Fox and Lillie brokerage manager Eamon Timms said the lift was “not expected to lead to any significant change” in price.

The wool industry also celebrated good news last week when proposed environmental labelling on apparel, which threatened to disadvantage Australian wool in EU markets, was deferred by legislators.

The proposed labelling would have rated synthetic fibres from fossil fuels better for the environment than natural fibres.

Mr Timms said Australian Wool Innovation deserved “full credit” for advocacy, preventing what would have been “perverse” labelling that would have been a major negative for wool sales.

Looking ahead, he said the market was “expected to maintain at these levels, and there may be some upside”.

Demand for medium wool was solid, but at the finer end, there was plenty of supply due to very dry seasons, and issues with tender and dusty clips.

While grower sentiment was helped by prices, the “massive challenge of the season, which is really hurting us”, remained the main concern.

Producer John Carter from Marnoo said all industries went through cycles and he was confident prices would firm up.

“We need to persevere and be dedicated to the industry and ride out the lows,” he said.

“I don’t tell clients when to sell, but having a bit stored up so you can capitalise when prices are up is a good idea.

“It is dry but our average annual break is May 22, so we have a way to go.

“The biggest issue is stock water, not wool prices; I don’t see any clients downsizing their Merino flocks for any other reason, or going to terminals, it is all water issues driving that.

“Long term wool has a sound future and dedicated growers see that.”

Trent and Kate Carter with John Carter, Wallaloo Park, at Marnoo. Picture: Zoe Phillips

Merino producer Duncan Barber from Metcalfe said the price rise was welcome but with the fall in numbers of Merino sheep he would hope for more market improvement.

“We are in the pretty lucky position of having our wool sold to a contract so those prices aren’t too bad, but any that isn’t in contract, the prices are not great,” Mr Barber said.