Weekly Market Wrap

Adrian Field Trading Manager

With Adrian Field, Melbourne
Assistant Trading Manager

October 3, 2003

Market trend continues

THE eastern market indicator fell another 19 cents per kilogram this week to close at 861c/kg.

The Australian dollar continued to strengthen against the US, and this is probably the main reason for the downturn in the market.

The dollar is now hovering around the 68c US mark, which is about four per cent higher than a little over a month ago.

In comparison, the physical indicator has almost mirrored the currency movement. Twenty per cent of the wool offered nationally this week was passed-in and 10pc was withdrawn prior to sale. Fourteen per cent of the wool in Sydney was passed-in, while 26pc was passed-in in Fremantle. Larger percentages continue to be passed-in in Western Australia.

GWC officially closed its operation in Geelong. This means that over the past two years, wool combing capacity has reduced by half and early stage processing has reduced by 40pc.

Unless the Australian dollar starts to stabilise, the wool market will continue to slide. We expect the market to perhaps ease again next week, but not so dramatically.

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