Weekly Market Wrap

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With Adrian Field, Melbourne
Trading Manager

November 3, 2006

Prices continue to soar

LAST week's wool market rise was significant, but it turns out it was moderate compared to the enormous lift in the eastern market indicator this week.

An overall rise of 62 cents per kilogram has catapulted the indicator to 844c/kg. Rises like this have not been recorded since September-October 2002.

Obviously the low passed-in rates continued, with only 5.7 per cent of the 59,000 bales passed-in.

All microns apart from broader crossbred wools enjoyed substantial rises.

Southern region

All Merino fleece types once again recorded significant gains this week, with nearly all types improving by 50-70c/kg.

Merino skirtings enjoyed their biggest jump for some time, especially for stylish wools finer than 19 micron.

Crossbred fleece wools increased about 10c/kg overall, with 28 micron and finer types again receiving the biggest premiums.

Carding wools followed a similar trend to last week, but were slightly better again. Most types improved 10c/kg.

Sales will be held in Melbourne, Fremantle and Newcastle next week, with 53,000 bales rostered for sale.

The price rises on the first two days of this week were similar to that of four years ago. The market levelled-out on the final day of sales.

There is now genuine demand at current price levels, but similar rises are not anticipated next week. The market will probably show little change in the short term.

Exporters, importers and processors will likely take time to asses their current and future positions considering the wool supply shortage.

Time will tell whether or not prices can be sustainable at these new levels. There is still the real chance the market could kick again at some stage due to the reduction in sheep numbers caused by the drought.

Most people would no doubt be happy if the market remained at current levels.

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