Weekly Market Wrap

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With Adrian Field, Melbourne
Trading Manager

September 2, 2005

Merino fleece dips, crossbred wool strengthens

THE eastern market indicator fell 6 cents per kilogram this week to close at 692c/kg.

In the southern region, Merino fleece types were most affected, with 17-23 micron wools shedding 5-15c/kg.

Merino skirtings again remained similar to last week.

Crossbred types gained about 5c/kg again this week with the limited wool offering. Cardings eased, but only slightly.

Passed-in rates equated to 12.4 per cent.

In the news

THERE has been mixed reaction to the Elders wool auction in China last week.

It was understood the prices achieved were higher than for the equivalent types sold in Australia, but in fact this was not the case.

There are also some concerns associated with offering wool in China.

What level of market control would the industry have compared to the level we have here in Australia? China would not be expected to pay a premium for our wool just because it is being offered in that country. If they have complete control, it could be the opposite.

Each Australian exporting company has many years of trading experience and trading relationships have been developed throughout these years. It is in their interests to achieve the highest possible price when trading wool - that is the nature of trading any commodity. It is also in their interest to keep prices buoyant as this helps generate confidence in the market.

The industry always welcomes change, but not this type of change.

Meanwhile, next week's sales will again be held in Melbourne, Sydney and Fremantle, with a total offering of about 50,000 bales rostered.

As long as the Australian dollar holds steady, the market should follow a similar trend.

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