Weekly Market Wrap
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With Brian Vagg, Melbourne
April 4, 2008
Market holds under big offering
THE Australian dollar traded from a low of 89.50 up to 93.50 US cents during the Easter recess.
On Good Friday, when it was trading at a low for some time, exporters were able to cover some currency at the lower levels. This would have assisted some traders to be a little more aggressive with purchasing, knowing they could make a margin from the currency trade and not necessarily the trading of wool.
It is a rather complex method of trading and in the wool industry, where trading margins are minimal and payment terms are long, all traders must utilise whatever mechanism they can. Generally, exporters' contracts are paid on a 120 to 150-day basis, and with the current higher prices there is much more pressure on their cash flow.
Wool sales resumed in the eastern States on Tuesday, with close to 66,000 bales put under the hammer nationally.
The northern region market opened firm for the 19-micron and finer types, while the broader types were slightly dearer. Merino pieces were also firm, while bellies eased slightly and locks and crutchings drifted by up to 20c/kg.
In Melbourne the market was much better, with Merino fleece types gaining 10-20c/kg. The 19-20 micron range received substantial support. The lower vegetable matter (VM) skirtings jumped 10c/kg and the heavier VM types remained firm.
Most crossbred types gained 10c/kg. Oddments were cheaper, especially the higher VM types. The Eastern Market Indicator (EMI) closed at 964c/kg, increasing 3c/kg.
There is a two-day sale in all regions next week, commencing on Wednesday, with 57,500 bales rostered for sale nationally.
Wool group reaffirms mulesing phase-out support
The Federation of Australia Wool Organisations (FAWO), like others in the industry, is well aware of the recent publicity given to mulesing in Sweden and other Scandinavian countries and the subsequent attention given to these matters in the Australian media.
A number of FAWO's member organisations participated in the cross-industry meeting in November 2004 at which there was unanimous agreement to phase out mulesing by the end of 2010.
FAWO reaffirmed its support for this decision and the associated commitment given to retailers at its General Meeting held on Friday.
FAWO believes the deadline will be achieved by a combination of means that include:
The adoption of alternative technologies to mulesing as they become available.
The use of modified management procedures, where applicable.
The adoption of breeding objectives which minimise susceptibility to fly strike.
FAWO also recognises that the ability to phase-out mulesing will differ between properties and will support the use of pain relief treatments in association with mulesing in the interim. Source: Rural Press.
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