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Weekly Market Wrap
With Adrian Field, Melbourne
Assistant Trading Manager
September 5, 2003
Market Steadies
THE eastern market indicator remained steady this week to
close at 927 cents per kilogram, a 1c rise on last week’s
close.
Fleece wools improved in most categories, although some crossbred
types were slightly cheaper. Merino pieces/bellies/oddments
continue to generate good prices.
It appears the market will continue to hover around the 900-950c/kg
mark.
The current indicator graph, which compares current prices
to that of the same time last year, suggests a mirror affect
whereby we should soon expect a sharp rise that then continues
for another 30 weeks. However such extremes are not anticipated
this year due to current stock levels overseas.
This week’s sales will be held in all three centres
with similar volumes of wool on offer.
We anticipate a similar market and, again, the currency will
play a significant role as well as the futures market.
Critical information regarding the former AWI board was revealed
in a number of Rural Press publications last week. People
within the industry should do themselves a favour and read
some of the articles. Issues surrounding fees, payments and
contracts are concerning, and hopefully this type of alleged
behaviour will generate some serious enquiry.
Sheep numbers in Australia have again been revised and the
latest is about 105 million – almost 85 million less
than 10 years ago. It’s been suggested that actual numbers
are far less and more like 95 million.
AWI and Meat & Livestock Australia (MLA) are joining forces
to spend $30 million on increasing productivity. Some suggestions
have been excellent, particularly breeding objectives such
as increased health, productivity and quality of the animal.
Reducing chemical applications and increasing resistance to
internal parasites is another commendable idea.
However, along with production objectives, we must continue
to improve demand for the product through research and promotion.
We must also continue to work on establishing new and maintaining
current relationships for the future.
There’s no point in becoming the best producers for
efficiency and quality if we don’t have established
markets for our product.
We must not forget that it was not that long ago that Australia
was producing more wool than any other country and our quality
was far superior. At one stage we had too many sheep and a
culling program was implemented to try and reduce numbers
in a desperate attempt to improve market activity.
The reason for such good demand at the moment is mainly a
shortage of supply, not just an increase in demand.
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