Weekly Market Wrap

Adrian Field Trading Manager

With Adrian Field, Melbourne
Assistant Trading Manager

February 20, 2004

Indicator steady but prices irregular

THIS week’s national wool offering was the largest since the first week of the season. Melbourne sales comprised just under half of the total offering of more than 66,000 bales.

The eastern market indicator now sits at 767 cents per kilogram following an 8c/kg drop this week.

According to Australian Wool Exchange reports, the northern indicator dipped 15c/kg and the southern indicator just 1c/kg. This result is a little surprising considering most Merino pieces/bellies and carding types fell significantly, however the indicator is mainly made up of fleece price results.

Most Merino and crossbred fleece types held in price, with the exception of superfine wools. Merino pieces/bellies and carding types were about 20c/kg cheaper.

Considering the large offering of “bread and butter’’ wools, the fall of 8c/kg is a positive result. In terms of the superfine category, the wools that sold in Tasmania last week were generally far superior, and this was reflected in the prices this week.

The market was very irregular, with fleece prices fluctuating throughout the week. Demand was weaker on the first two days before stabilising on the final day.

The behaviour of the Australian dollar was similar to the market, fluctuating considerably throughout the week. Some economic analysts are predicting the dollar could reach 85c now that it has broken the 80c mark. This could spell further problems for prices and export markets in general.

General

AN article in the rural media this week stated that a senate inquiry had called for legal action to be considered against the former board of Australian Wool Innovation, and that the senate rural and regional affairs committee had also slammed the federal agriculture department for failing to properly monitor AWI.

Many members of the wool industry will likely welcome this news, as there has been much discussion and curiosity over how woolgrower funding has been managed.

Meanwhile, there has been a recent swing to breeding more Merino sheep in traditional Merino areas such as the Riverina.

Many local producers feel there will soon be a glut of crossbred sheep. Add to this the fact that good breeding sheep (Merinos) are still achieving between $80 and $100.

Market outlook

PROVIDING the dollar remains steady, we should see a steady market, especially considering the small offering for next week’s sales.

PAST ISSUES
February 13, 2004	September 26, 2003
February 6, 2004	September 19, 2003
January 30 , 2004	September 12, 2003
January 23, 2004	September 5, 2003
January 16, 2004	August 29, 2003
January 9, 2004	August 22, 2003
December 12 , 2003	August 15, 2003
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