After a lack lustre series of wool auction sales last week, this week saw the complete reverse. Australian wool auctions produced action aplenty from the outset and all to the positive. The main impetus centred on Merino wool with the fleece sector the most sought after as overseas users placed orders to renew the rather empty greasy wool pipeline in front of machinery globally. China was again dominant in the demand stakes and seemed intent on getting set for quantity, somewhat irrespective of price as supply fears around the availability of the quality wool required grows. Meanwhile the foreign exchange rates of the AUD versus the USD is at it’s lowest level since the middle of June 2017.
As a result of the extreme competition this week, the AWEX (Australian Wool Exchange) EMI (Eastern Market Indicator) lifted substantially to end the week at both the daily and week-ending all time highest level of 1891ac/clean kg. This represented a weekly rise of 55ac/clean kg or a 3% gain for the week in overall wool values. We are now 23% dearer than last year. The EMI gain when expressed in USD (US Dollars) was somewhat diluted compared to the local AUD price rises as the forex (foreign exchange) rates fell nearly 1% for the week. This helped those buying wool in USD negate some of the price hike. As most of the Chinese buying activity is conducted using US dollars, this falling value of the AUD only helps sellers here in Australia as the rate heads towards the .7000 mark more each day.
Click here to access AWI's Wool Weekly Market Report (PDF 642 KB)