Wool prices steady, volume on offer lower than normal

The volume of wool being sold is down significantly year-on-year. Two experts give their opinion on why and when prices may improve.

Wool prices continue to meander, despite significantly lower volumes on offer year-on-year.

The benchmark Eastern Market Indicator fell 1c/kg to 1098c/kg last week, although in US dollar terms it rose 1.5 per cent.

Elders state wool manager Lachie Brown said less wool was being offered year-on-year due to reduced sheep numbers overall, producers selling stock due to the tighter season in some areas and average cut per head being lower due to the poorer season.

There was 27,698 bales offered nationally last week, with about 34,000 expected this week.

Mr Brown said normally at this time of the year volumes were at 40,000 bales-plus.

“The price is playing a part in lower volumes too. The price meandering along isn’t encouraging people who don’t have to sell straight away to sell,” he said.

Elder state wool manager Lachie Brown.

Mr Brown said prices were positive in January and February this year, but they started a gradual decline ever since.

“Global economic markets are struggling, there’s political issues in Europe and the Middle East and the US election is putting plenty of doubt in the minds of Chinese processors who are concerned about trade barriers if Trump is elected.”

“Global economic growth is at a low level which has a strong influence on wool demand, because it is a discretionary item.”

Mr Brown said despite the flat nature of the market, it was performing OK for it being out of season of normal wool demand.

“It is too close to the northern hemisphere winter to get greasy wool processed in time for the winter season and 2025-26 is too far away , so it is typically a lower demand period anyway.”

Most Merino fleece prices fell 7-21c/kg last week, with the 21 micron indicator at 1243c/kg, down 7c/kg.

However, Mr Brown said the ultrafine fleece, at 15-16 microns had experienced a pick up in demand in recent weeks.

Crossbred wool was up to 10c/kg dearer last week, due to lower volumes on offer.

Wool volumes are lower than normal for this time of year. Picture: Andy Rogers

Fox and Lillie wool brokerage manager Eamon Timms said he thinks the market is continuing its steady run because it is being supported by the lower volumes.

“One thing a lot of users are saying is they realise the wool price is low, but they are constrained by banks and the inability to hold stocks,” Mr Timms said.

Both Mr Brown and Mr Timms agree the price would rise, just when it would be was unknown.

“There is acceptance the price will rise into next year, but when it will be is the question. The US election might provide some economic stabilisation,” Mr Brown said.

“The substantive move that needs to happen probably won’t be until later in 2025. When the demand does come on, we expect a fairly significant movement when it does,” Mr Timms said.