The Australian wool market experienced a significant upturn in its penultimate sale of 2023, witnessing substantial price gains, particularly in the merino sector. By the end of the selling period, the market recorded an average increase of 25 Australian cents (ac) across all merino offerings, extending also to the finer segments of the crossbred category. However, broader crossbreds and cardings did not see similar demand, falling behind most wools on sale.
Notably, the super fine merino fleece sector, especially those finer than 18.5 micron, saw some of the most intense competition in recent times. Closing quotes placed general wool types in this category at 50 to 70 ac higher, with specialists recording increases of over 100 ac. This surge in buying interest largely stemmed from the persistent market influence exerted by Chinese mills over the past two months. This shift has led to China acquiring a significant portion of wool clips, traditionally dominated by European buyers, the Australian Wool Innovation (AWI) said in its commentary for week 23 of the current wool marketing season.
Exporters indicated that the market gains at the finer end of the Australian wool spectrum were not unexpected. The excellent value of these wools, trading below the 2000 ac/kg clean mark, was well-recognised, but financial limitations and tepid demand from European markets had previously restrained buying activities.
The week’s auction buying patterns mirrored those of the previous week, with currency fluctuations playing a key role. The Australian Dollar (Au$) depreciated by 1.8 percent against the US Dollar and 1.3 percent against the Yuan, bolstering the 25 ac gains in the 18.5 to 25 micron wool types. The Western Australian centre at Fremantle was a prime example, where Au$ prices closely matched the Chinese Yuan bid prices, the AWI commentary said.
Looking ahead, over 50,000 bales are scheduled for sale from Tuesday to Thursday next week in Melbourne, marking the year’s final sales event.
