CURRENCY exchange rates lifted Australia’s wool auction market this week and growers responded by holding fewer bales back.

The Australian Wool Exchange said the market recorded an overall positive movement this week, for the first time since the beginning of March, heavily influenced by currency movements.

AWEX said the national bale offering also fell by 6468 bales to 43,680 bales, pushing the year-on-year total below last season for the first time since September.

“There have been 7,614 fewer bales put through the auction system compared to the previous season,” AWEX said.

“The market was driven by solid increases in the Merino fleece types.

“This was reflected in the Micron Price Guides (MPGs) across the country, that rose by between 8 and 53 cents,” AWEX said.

“The largest rises were felt in the north and west, as these centres were yet to realise the gains recorded in the stand-alone Melbourne sale of last week.

“With positive movements also recorded in the skirting, crossbred and oddment sectors the AWEX Eastern Market Indicator (EMI) added 16 cents for the series, closing at 1158 cents/kg clean,” AWEX said.

The weaker Australian dollar — the AUD lost 0.98 cents since the close of the previous series — meant when viewed in US dollar terms, the EMI closed marginally lower – one cent to US 743 cents/kg.

“The higher prices on offer were welcomed by most sellers, resulting in just 3.4pc of the national offering being passed in.

“This was the lowest passed in rate for the season,” AWEX said.

Demand at static level of recent months – AWI

Australian wool auctions were heavily influenced this week by the movements in the foreign exchange rates, Australian Wool Innovation trade consultant Scott Carmody said.

“All the local price indicators moved strongly to the positive as supply for the week was lower than expected and some solid enquiry was emanating from not just overseas, but from the many attendants at the highly successful International Wool Textile Organisation congress held in Adelaide this week,” he said.

“The Australian dollar (AUD) charted to levels up to 2pc lower against the US dollar (USD) under assumptions and commentary from the USA that interest rates in that nation would remain at similar levels for the foreseeable future.

“This put upward pressure on the local market price being paid in AUD, but demand was still firmly sitting at the static levels being witnessed for the past few months.”

Mr Carmody said sale offerings for varied reasons dropped by 13pc from the expected volume and this helped the bales that were eventually offered sell to advantage.

“The largest Chinese top maker was the greatest influence on the Merino sector this week by taking over 18pc of the total offered volume.

“Australia’s largest two trading houses were strongly supporting, but by no means were they forcing the price,” he said.

“All other parties were interested and active, but just could not compete for the bales at the level at which prices were eventually settling at.

“The purchasing activity and intent of that giant top maker did appear to give others more confidence though.”

Next week’s offering is of a similar size with currently 44,356 bales on offer in Sydney, Melbourne and Fremantle.

Click here to see the latest AWEX Micron Price Guides.

Sources – AWEX, AWI.