Record small national wool offering pushes market up

The smallest national offering of wool bales on record brought good news to sellers and buyers last week, as the Australian wool market rose for the second week in a row.

There was no Fremantle sale last week, and the Melbourne and Sydney sales saw the national offering fall to 15,375 bales — 3452 fewer than the previous week.

It was the lowest national quantity since Australian Wool Exchange records began in 1995.

The market recorded a humble 1.1 per cent increase, or 13¢, with the Eastern Market Indicator closing at 1183¢/kg for the week.

The rise was welcome news for farmers and sellers, after wool prices drifted lower in May — starting the month at 1208¢/kg on May 5 and finishing at 1179¢/kg on May 27.

The lowest price point in May, 1155¢/kg, was the lowest price in Australian dollars in five years, and 24 per cent below the five-year average.

Individual microns recorded price increases of 2¢ to 30¢, with the exception of the 16.5, 18 and 21 microns in the south sale recording little change.

AWEX analyst Lionel Plunkett attributed the rise almost entirely to the small offering.

“The wool market often acts with a mind of its own,” he said.

“This series, however, the market followed conventional economic theory, the reduced supply attracted stronger demand.

“The result of this increased demand was general price rises across the board.”

Mr Plunkett said it was worth noting that the strengthening of the Australian dollar meant the price increases, when viewed in US dollar terms, were more significant.

The limited offering of skirtings attracted strong demand, pushing prices higher, generally between 20¢ and 30¢.

The crossbreds also enjoyed rises this week, with micron price guides between 26 to 28 rising by 12 to 41¢.

A limited offering of 32 micron wools were generally unchanged.

The oddment market also continued to rise, again Sydney recorded the largest gains, catching up with the other centres.

Gains in locks, stains and crutchings pushed the two carding indicators up by an average of 24¢.

In its latest market update, released last week, Rabobank animal protein senior analyst Angus Gidley-Baird said while the retail market remained soft, there were “signs of recovery appearing”.

“If confidence starts to recover, clothing orders placed for 2021 may start to see the wool market stabilise,” he said.

“We believe June may be the low point in the market before starting a slow recovery.”

Quantities will increase this week as Fremantle re-joins Sydney and Melbourne on the selling program, with 24,140 bales available to trade as of last Wednesday.