Weekly Market Wrap
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With Adrian Field, Melbourne
Trading Manager
June 4, 2004
Indicator breaks 800c/kg mark
THE eastern indicator jumped 18 cents per kilogram this
week to close at 808c/kg, the highest level since back in
January this year.
All combing types recorded good rises, particularly Merino
fleece wools, which jumped up to 32c/kg. Merino skirtings
remained very solid and crossbred wools gained another 10c/kg.
The only category that failed to rise in price was the carding
section, which fell about 5c/kg.
The main reason for the sudden lift was the fall in the Australian
dollar. It dropped 2-3 per cent during the week, and is now
sitting at 4c lower than this time last week. This is a very
substantial fall within one week.
Again, the market lift represented a 2-3pc rise.
News
THE 'Hillcreston' property in New South Wales sold a bale
of 12.6 micron wool this week for 75,000c/kg.
The wool volume exported in April was up by 14.3pc compared
to last year, however the value of this wool was 3.1pc less.
There has been a 6.8pc increase in volume exported from December
2003 to April 2004 compare to the previous year.
There have been substantial increases into China and India,
but decreases into Europe and Korea. Korea fell by a massive
71.4pc.
China has imported 43.6pc of all wool exported so far this
season, which includes 50.4pc of all greasy wool.
The AWTA recorded a 22.5pc increase in bales tested in May
compared to the same month last year.
This is an amazing result, although many growers may have
held onto last year's wool following the sharp decline in
prices after the Easter break. This could also explain why
wool volume tested this time last year was suddenly down on
the previous year.
Woolstores have also been extremely busy with receivals recently.
In many cases, they are looking at two years production arriving.
Production forecasts are now being revised upwards compared
with last year.
There has been a fall in volume of 19.5 and finer micron
wools tested by 3.7pc. It appears there is less wool being
produced in the 17.5 micron and finer category.
Efforts to restrict and hopefully eliminate dark fibre contamination
are well on the way.
AWI has funded a program that will commence from July 1. The
scheme will be known as 'Dark and Medullated Fibre Risk' (DMFR)
rating scheme.
All brokers have been advised, as they are the first point
of contact for woolgrowers.
Hopefully this program is successful in preventing contamination
and strengthening our reputation as a quality, contamination-free
wool producing country.
Outlook
NEXT week's sale will be held over two days and the national
offering is only a little over 41,000 bales. Little change
in the market is expected.
Prices may continue to rise, and once again activity will
largely depend on currency movement.
Smaller volumes are expected to be offered over the next two
months, which should help maintain price stability.
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