Weekly Market Wrap

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With Adrian Field, Melbourne
Trading Manager

February 11, 2005

Steady as she goes – but dollar rising

THE eastern market indicator gained 4 cents per kilogram this week and now sits at 745c/kg.

Much of the rise is attributed to the stylish fine wools offered in Tasmania. Wool types similar in style to normal southern selections were similar to last week’s price levels.

The top price for the week from the designated superfine sale in Tasmania was 8800c/kg. This bale was grown by the Phillips family and bought by Fuji.

Passed-in rates nationally were 13 per cent.

Prices for Merino fleece types were generally unchanged, apart from superior fine wools that received various levels of premium prices.

Merino pieces and bellies and crossbred types remained unchanged, while cardings continued to sell well.

Meanwhile, recent figures from the ABS highlight China’s continual dominance as the major importer of Australian wool.

China has increased imports by 57pc in weight and 40pc in value for the July-January period compared with the same time last year. This means that so far this financial year, 51pc of all wool exported has been destined for China. It imported 46pc of all exports for the 2003-2004 season.

The top five countries Australia exported wool to were China, Italy, India, Taiwan and France.

Figures released by AWTA showed a 3pc increase in bales sampled. The only State to record a fall was South Australia, reducing by just 1pc.

Queensland showed a massive increase of 22.5pc compared to last year, which would suggest that flock numbers are recovering well following years of severe drought.

Back on the market, next week’s sales will be held in Melbourne, Sydney and Fremantle, with more than 79,000 bales on offer. Melbourne will comprise more than 40,000 of this total, which is the biggest offering since the opening sale of the 2004-2005 selling season.

The Australian dollar has risen sharply over the past two days. Combine this with such a large offering and it amounts to significant pressure on the market.

The market could struggle a little early next week, before recovering towards the end of the week.

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