Weekly Market Wrap
For the latest edition, please Refresh
frequently visited pages.
With Adrian Field, Melbourne
Trading Manager
November 19, 2004
Market slides under currency pressure
THE eastern market indicator took a change of direction
this week to fall 14 cents per kilogram. The indicator now
sits at 735c/kg, which is back at the lower levels of several
weeks ago.
The main reason for the lower prices was the continued strengthening
in the Australian dollar. Early yesterday the dollar reached
78.2 US cents, which was a nine-month high.
The currency has eased a little and is now resting at 77.5
US cents.
Wools finer than 19 micron were most affected this week,
with some poorer 18 micron wools falling up to 35c/kg.
Broad Merino types were less affected and eased only 5-10c/kg.
Crossbred wools had a similar fall, whilst cardings continued
to sell very well and were virtually unchanged.
Passed-in rates were quite low, equating to 14 per cent
of wool offered. Although passed-in rates seem to be improving,
the New Zealand offering had a passed-in rate of 33pc.
In the news
THERE was some big news released this week with the announcement
that Elders will conduct a "trial auction'' in China
next week. The auction will be held at Nanjing and the offering
will represent just under 1000 bales of Merino wools ranging
from 18.2 to 23.9 micron. This wool is made up of 12 different
southern region clips.
There has already been much discussion and debate about
this move.
The industry is continuing to search for new and better ways
of selling wool, with many methods having been tried in the
past and most failing to date.
BWK Elders Shanghai marketing manager John Roberts was quoted
as having "received broad support and was confident there
would be plenty at the trial, but he was not altogether confident
of a booming price response''.
One could question why Elders/BWK have kept this such a secret
for so long? Most throughout the industry discovered the news
through Chinese contacts.
This trial would likely have taken a considerable amount
of time and effort to prepare.
Could Elders/BWK be limiting themselves and their clients?
There are more importers out there than China. Although China
dominates Australian wool imports, 50 per cent of our wool
is exported to other countries.
The true outcome and response of all those who participate
will be interesting.
Meanwhile, the annual general meeting of AWI is being held
today in Ballarat, where three new board members will be elected.
On the market for next week, if the currency remains the
same, there would likely be little change.
There seems to be good general demand, but currency again
plays the defining role.
Sales will be held in all three centres, with an offering
totalling 62,000 bales.
|
