Weekly Market Wrap

Adrian Field Trading Manager

With Adrian Field, Melbourne
Assistant Trading Manager

August 29, 2003

Weaker currency assists improved market

THE eastern market strengthened this week with the indicator closing at 926 cents per kilogram, a rise of 14c/kg.

The southern indicator jumped 20c/kg, while the northern indicator increased by a modest 8c/kg.

In the south, the most sought-after wool was in the 19 micron and finer fleece wool category. The opposite was evident in Sydney, mainly due to poorer style wools on offer compared to the previous week's sale at Newcastle.

The improvement in market activity was caused by a weakening of the Australian dollar combined with improved demand from Europe, particularly for finer types.

Some promising news for the week was an announcement by AWI, which, along with Berkeley Apparel, has launched a machine washable wool blend men's suit that will not lose its appearance or shape. This must be good news for woolgrowers producing 20-21 micron, with 60 per cent of the garment comprising this range.

Some not so good news was the potential realisation that NSW may have lost up to 8 million sheep due to the severe drought conditions. Numbers in one region are down 24pc on last year and 53pc on 10 years ago. Yardings in the Riverina area are expected to be down a massive 30-40pc compared to last year.

There has been much focus recently on strategies and rescue plans that will hopefully rebuild the national flock. However, with first cross ewes averaging $133 and Merino ewes selling for up to $130, it will be difficult for some farmers trying to build-up stock numbers.

Sales will be held in all three centres again next week. Another small offering is expected to hold up the market, providing the Australian dollar and demand don't alter significantly.

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