Wool market spins on its heels and breaks the downward trend with rises across all types

The Australian wool market has spun on its heels and bucked the longest run of weekly losses since 2003, with gains in Fremantle of between 21¢ and 49¢ on the Merino Price Guide to a 1320c/kg.

At the end of the 2022/23 season a fortnight ago the market had recorded eight consecutive losses, as opposed to 10 consecutive weeks during the 2003 season, causing widespread industry concern and sellers to withhold their wool in search of a better price.

The first week of the new season was up due to lower supply and a slight increase in demand, according to Australian Wool Innovation.

“Forward sellers, had been betting on the usual trend of between 100,000 and 110,000 bales being offered for the final two sales pre the midyear recess (which starts next week),” an AWI spokesman said.

“Local sellers resistance to the low prices being offered for the past two months forced this figure down to just 80,000 bales to be offered in the two weeks of July.”

Most of the wool held back was Merino, which placed pressure on exporters, manufacturers and indents from overseas for their prompt delivery requirements.

“A swift reassessment in strategy from participants saw all return to full activity simultaneously and the resultant dearer market,” he said.

A small increase in demand was evident, with buying from India and Europe also keener on the better specified lots.

The Australian Wool Exchange reported that it was a strong start to the season in what is normally one of the larger sales of the season ending up at 36,175 bales — “down 12,685 bales from week one of the previous year,” AWEX market information manager Lionel Plunkett said.

“The market opened with increases across all Merino fleece types and descriptions and continued to slowly strengthen as the sale progressed,” Mr Plunkett said.

The Individual MPGs for Merino fleece in Sydney and Melbourne gained between 3¢ and 44¢ for the first day, while in Fremantle, which sold last, the increases were larger, with the Western fleece MPGs up between 21¢ and 49¢.

The AWEX Eastern Market Indicator added 14¢ for the day, although later gains in WA continued to impact the market into day two.

“Across the country the MPGs added between another 1 and 51¢,” Mr Plunkett.

“The EMI climbed by a further 21¢ and closed the week 36¢ higher at 1,162¢.”

It was the first weekly rise in the EMI since the May three, and the largest weekly rise in the EMI since February nine, when the EMI gained 44¢ for the week.

All other sectors of the markets recorded positive movements except for the unchanged 30-micron MPG and the carding indicator in the South.