Weekly Market Wrap

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With Brian Vagg, Melbourne

February 1, 2008

Market slides

THE market resumed on Wednesday, with the eastern market indicator (EMI) falling 21 cents per kilogram (2 per cent) to close at 1024c/kg. There was no sale at Fremantle.

The rising Australian dollar coupled with tighter credit availability in China in the past fortnight, flowing from the sharp fall in the Shanghai share market in the fallout from the US sub-prime crisis, were said to have contributed to the market fall.

On Wednesday, most fleece types fell 20-35c/kg clean. Merino fleece of 18-19.5 micron generally fell 20-30c/kg and the broader types received discounts of 25-35c/kg. Some selected better types were keenly sought.

Skirtings that contained below 3pc vegetable matter (VM) received discounts of around 30c/kg. The higher VM types were less affected.

Crossbred fleece types were around 8-10c/kg cheaper. Locks and crutchings were less affected, with 5-10c/kg decreases.

On Thursday the market followed a similar trend, with 17-19 micron fleece drifting another 20-30c/kg and the broader types were around 20c/kg easier. It appeared to be a little irregular market, with lines of very similar specifications varying greatly in price.

As we have seen in the past months, the less stylish, low tensile strength wools are becoming more neglected.

Skirtings continued to slide by around 20c/kg, however selected lots were only marginally cheaper. On Thursday the EMI closed at 1007c/kg, 17c/kg below Wednesday's close.

There were just over 44,500 bales offered across Australia, with the national pass-in rate this week at 19.3pc.

In recent weeks we have commented that the industry is unable to sell wool tops at a price to validate current greasy prices. This, on top of world economic uncertainty, has caused a market correction.

Despite the falls received this week, prices are still high when compared to the last 12 months.

A large offering of just over 68,000 bales will be available next week, with all regions selling.

Southern region

The market opened on Wednesday with all fleece types recording substantial falls. This was repeated on Thursday, with no help from the rising Australian dollar.

The 18-19.5 micron fleece closed the week 40-50c/kg lower. The 20 and 21 micron types were affected the most, drifting by up to 55c/kg clean, and 22-24 micron wools didn't escape, falling by 30c/kg.

The southern market indicator closed the week down 42c/kg to close at 968c/kg.

Crossbreds were generally 15-20c/kg easier, except the 26-micron range, which closed in positive territory.

Skirtings followed the trend of the fleece and closed the week down 35-45c/kg. Locks and stains received the biggest falls in the oddments section.

AWI showcase new products at US trade show

Australian Wool Innovation has presented innovative product technologies to benefit the active outdoor customer at Outdoor Retailer - one of the world's largest active and outdoor trade shows.

Held in Salt Lake City, US, from January 23-26, by closing day more than 6500 people had attended the show, including retailers, designers, manufacturers and media.

The new product technologies presented by AWI, include Merino Active Classic, Merino Active Ultimate and Merino Active Performance - a new collection of Merino fabrics created using some of the most cutting edge textile technology in partnership with manufacturers from across the globe.

Merino Active products deliver natural quality, durability, breathability, moisture absorption and elasticity - everything required to stay active and allow for ultimate performance. Source: Rural Press

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