Weekly Market Wrap
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With Adrian Field, Melbourne
Trading Manager
August 20, 2004
Market slides
THE eastern market indicator closed 12 cents per kilogram
lower this week to finish at 776c/kg.
Most of the price falls were in the 21-24 wool micron range,
where prices for some types dipped by up to 20c/kg.
All other wools were slightly cheaper, with 20 micron and
finer types least affected.
A total 16.6 per cent of the wool offered throughout Australia
was passed-in, which is around the average mark of 16.8pc
for the season so far.
The stronger Australian dollar was again the main reason
for the fall in prices.
According to industry forecasts, the southern region is likely
to be in two-day selling mode for the next few weeks, with
offerings of about 60,000 bales per week predicted. Although
the offerings are low for this time of year, they are up on
last year's figures.
It appears that more producers are willing to offer their
wool and meet the current market, rather than take a punt
hoping they might achieve the levels of two years ago.
Meeting the market is a wise decision considering the currency
trend. If the Australian dollar continues to climb, the market
will continue to fall, especially for broader wools.
The wool market is definitely being influenced by world economic
conditions more than ever, and rising freight and logistical
costs are also impacting on the market.
Prices next week will again follow currency movements, with
fine wools continuing to be least affected.
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