Weekly Market Wrap

Adrian Field Trading Manager

With Adrian Field, Melbourne
Trading Manager

May 7, 2004

Market slides

SALES were held in all three centres this week, with Melbourne and Sydney staging three-day sales and Fremantle selling over two days.

A total 73,800 bales were offered and 55,600 were sold. About 25 per cent was passed in, with Fremantle passing in 33pc.

The eastern market indicator continued its downward trend this week to close at 766 cents per kilogram, 12c/kg lower than last week.

The result was not too damaging considering many types fell at least 50c/kg.

Most combing wools between 20 and 30 microns were cheaper, with medium to broad Merino wools most affected.

Wools finer than 19 microns were least affected, especially stylish wools, which actually improved slightly.

Carding types were up to 30c/kg cheaper, and poor demand was evident for wools containing high vegetable matter.

Market demand for poor styled wools continued to drift.

The wool on offer was again typical of this time of year, with plenty of vegetable matter and dust present.

AWEX estimates that there are more than 650,000 bales in store across Australia are made up from the following:

WA – 201,000
SA – 101,000
NSW – 152,000
QLD – 30,000
VIC – 158,000
TAS – 9000

There is certainly no shortage of wool.

Meanwhile, AWH has commenced work on its proposed new selling facilities in Melbourne and Sydney. It is hoping to have everything in place and ready to go for the start of next season (late July).

The industry is still waiting on news from AWEX to see if it will continue current operating procedures.

There could be substantial changes considering AWEX will effectively lose almost 70pc of its business.

As an industry, we still need a neutral body to govern quality control and code of practice, which includes policing wool sold through the auction system.

If AWEX folds, who will be responsible for the way wool is prepared for sale, before it leaves our shores?

One thing we do not need at the moment is to jeopardise our reputation for quality.

Next week’s sales will be held in all three centres and bales allocated total 67,700. All three centres will sell over two days.

With the Australian dollar dipping further, the market should find some stability, however there is still significant uncertainty. There is likely to be little change.

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