Weekly Market Wrap
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With Adrian Field, Melbourne
Trading Manager
November 26, 2004
Dollar still rising, market falling
THE eastern market indicator reached its lowest level since
November 2001 to close at 719 cents per kilogram this week.
The market dipped 16c/kg for the week.
Over the past fortnight the dollar has climbed 3.5 per cent
and the market has fallen by almost 4pc.
Unfortunately, the dollar has risen another cent overnight
and is expected to continue rising through the 80 US cent
mark.
Passed-in rates increased to 16pc, which is slightly higher
than the season's average.
All Merino fleece types fell by 25 to 30c/kg, crossbred
wools were less affected but still decreased by up to 15c/kg,
and while carding wools were least affected, they still fell
by up to 10c/kg.
China wool sale
THE first Chinese wool sale was held on Tuesday by Elders.
There was very limited information from the sale in regards
to the breakdown of costs associated, so it is very difficult
to determine whether it was a success or not.
Some articles quoted the prices as comparable with that of
Australian sales held this week.
Some of the items that need to be taken into consideration
are:
- What are the selling costs?
- What are the costs associated with freight, interest
and insurance and who pays for them?
- What are the payment terms to the grower?
These figures should be released - then we would have an
accurate picture of whether or not the sale was successful.
We can then also compare prices to Australian-held auctions,
remembering that money received from Australian auctions are
free of all costs (with the exception of the broker charge/fee)
because they are built into the price paid.
AWI Board
WAL Merriman of the Merriville stud in Boorowa, NSW, has
been voted in as the newest board member of AWI.
He received enough votes to push out former member David
Boyd and will be taking over his role as manager of the industry's
chief research and development body.
Wal would like to focus on money being spent on the marketing
of wool rather than on other wool research and development.
Fifteen per cent of the 29,500 shareholders voted, and results
were very close with new candidates receiving 47pc of the
vote - there is a clear message that growers who voted are
after change.
Meanwhile, the market is likely to fall further next week
unless the currency weakens.
As a general guide from recent sales, prices should mirror
currency movements. Sales will be held in Newcastle, Fremantle
and Melbourne.
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