WOOL prices fell at Australian auctions this week despite the bale offering dropping to less than 28,000 bales.

The Australian Wool Exchange said after six selling days with consecutive rises, during which the benchmark AWEX Eastern Market Indicator added 40 cents, the market has been unable to maintain this upward trajectory.

The overall fall this auction series was driven by losses in the Merino fleece sector, AWEX said.

“With Fremantle again holding no sale this week due to limited quantity, the national offering dropped to 27,490 bales.

“With only one sale left in the 2023/24 selling season the total amount offered is set to finish lower than the previous season,” AWEX said.

“Season to date there has been 1,789,762 total bales offered, 43,528 bales or 2.4 percent lower than last season.

“The individual Micron Price Guides (MPGs) for Merino fleece dropped by between 2 and 38 cents.”

AWEX said the only exception was the 20 micron fleece in the north, where a limited offering of this type attracted strong competition and the MPG closed 3 cents higher as result.

AWEX said skirtings were well supported throughout the week, finishing the series generally unchanged.

“The oddments had a mixed week, with the north rising and the south falling, for an overall small average loss.

“A solid week for the finer crossbred sector in the southern region, where the MPGs for 25 to 28 microns gained between 5 and 17 cents, prevented the EMI from recording a larger fall.”

AWEX said the EMI finished the series 10 cents lower, closing the week at 1160 cents/kg clean.

“The softer market contributed to the passed-in rate of 7.9pc, the largest in six weeks.”

Buyers downshift at auction – AWI

Australian Wool Innovation trade consultant Scott Carmody said there were somewhat unexpected tougher market conditions at this week’s Australian wool auctions.

“Buyers, both here locally in sale rooms here and overseas, generally downshifted to safety mode awaiting better demand signals indicating acceptance – or otherwise- of the recent price rises gained over the previous weeks,” he said.

Despite the exceptionally small volumes available, due mostly to Western Australia not holding an auction sale, prices still lowered by around 0.8pc within the Merino sector.

Mr Carmody said perhaps manufacturers and traders who were wanting to buy decided not to spook the market.

“Trying to execute contracts in a very limited supply situation would have pushed price levels higher, taking sales on the books into loss and limiting future selling opportunities.

“The first sales of the new Australian financial year usually sees large volumes hitting the market and holding off to purchase into larger supply sale weeks was maybe the strategy,” he said.

“The stronger AUD against the major trading currencies accounted for more than half of the price depreciation this week.

“It has been widely reported that the Reserve Bank of Australia (RBA) will probably be one of the last G10 central banks to cut interest rates, placing further upward pressure on the AUD against the majors,” Mr Carmody said.

The Fremantle auction returns to the selling roster next week, pushing the national offering higher for the final sale of the season. As this will also be the last sale of the current financial year, many sellers wishing to sell this year take this final opportunity, AWEX said. There are currently 40,203 bales expected be offered in Sydney, Melbourne and Fremantle.

Click here to see the latest AWEX Micron Price Guides.

Sources – AWEX, AWI.