Some solid demand was evident in the Australian wool market as buyers attempted to fill orders before opportunity becomes limited due to the annual mid-year three-week recess.
Continuing the positive start to the selling season, the AWEX Eastern Markets Indicator (EMI) recorded its second rise on a row gaining 18 cents to finish at 1134 cents per kilogram, clean.
The national offering of bales also finished on a higher note at 4441 more bales than the previous week totalling 35,262.
This was the largest number of bales offered since the end of March.
According to the AWEX weekly wool market report any wool required for export orders during that time needed to be purchased this week, pushing the demand higher as exporters fought hard over the wool on offer.
This increased demand helped push the prices higher across most Merino fleece types.
Individual Merino price guides (MPGs) across all three centres generally rose by five to 92c with the 17.5-micron MPG in the south recording the largest increase for the series.
But in what has been an already crushing year for woolgrowers it could be a short-lived increase according to industry specialists.
Elders wool manager Goulburn, NSW, Craig Pearsall, said he hopes the rise has a bit of ‘substance’ about it, but he doesn’t hold a huge amount of hope, anticipating the demand after the recess and beyond is going to be sluggish.
“The market showed some life and confidence, but I still think the industry is struggling,” Mr Pearsall said.
“I don’t think overseas demand, especially Europe, has changed a lot, it is still a Chinese driven market.
I don’t think overseas demand, especially Europe, has changed a lot, it is still a Chinese driven market– Craig Pearsall, Elders wool
“Talking to my connections, they are saying Europe is quiet, their orders are up to two thirds down compared to this time last year and there is still held-over stocks in shop fronts from last year’s winter.
“I’d like to paint a brighter picture but on those comments I can’t. The demand is going to be slow.”
Mr Pearsall said Covid-19 has shown the entire world just how fragile the supple chain is.
He anticipates when the industry does see some demand, it will be a two-tiered market.
“Better wools will come from the Southern Tablelands and New England areas in NSW for example,” Mr Pearsall said.
“They will be limited amounts of wool because this time last year Dubbo were about 60pc down on receivables.
“That is not going to have changed. The wool supply there is still going to be very low, and the wool that we have held over at the moment from brokers stores is quite low yielding, low specifications.
“The two-tiered market may see the better wools gain 200c or more.”
But he said it all points to a long road ahead for both the wool and meat market with limited end users.
“There are no holidays, no restaurants, no cruises and no retail, it has just crashed,” Mr Pearsall said.
“But it will all turn around, it always does.”
Sales will recommence the week beginning August 3.
