Weekly Market Wrap

Adrian Field Trading Manager

With Adrian Field, Melbourne
Assistant Trading Manager

July 4, 2003

Market finishes on firmer note

THE eastern market indicator finished the 2002-2003 selling season at 937 cents per kilogram - 36c/kg less than last week's close.

After an initial fall of 41c/kg on the Wednesday, the market recovered 5c/kg.

This was a positive sign heading into the three-week selling break, and goes against the trend of recent years where a weaker market prior to this period has been evident.

Many in the industry are now asking the question: how will the market be after the recess?

The answer largely depends on how big the first wool sale offering will be.
Currently there are 75,000 bales allocated nationally, and this will test the market. If the volume exceeds this total, market activity could be irregular.

On a positive note, there has been improved interest from overseas, particularly China.

Typically, demand for wool is the key. If China starts buying, then we can expect solid market levels heading into the new season.

The significant reduction in overall wool production is one of the main topics of discussion heading into next season.

As mentioned previously, restructuring and rationalisation within the trade will continue. The 'pie' is continuing to shrink and many companies will struggle to compete successfully.

Let's hope next season kicks off on a positive note and market activity remains strong.

PAST ISSUES

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