AUSTRALIA'S wool market continued to meander along searching for a meaningful direction last week.
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In the final wash-up of a relatively small offering of 38,700 bales of which 11.5 per cent were passed in, the EMI indicator fell by 11 cents.
In USD terms the market was virtually unchanged with just a single cent movement to the downside, and the Europeans saw a 3-euro cent increase in the EMI.
Although the overall result was negative on paper for Australian growers, more positive signs did start to emerge that could herald better market conditions in coming weeks.
The superfine end of the clip showed a stronger tendency on the final selling day in Sydney with solid premiums again being paid for the better-grown wools.
Medium merino wools, particularly the 21 micron category or China Type 55 was the best performer over the three days of selling with prices finishing within a couple of cents of the starting price.
Crossbreds, and for a change cardings as well, both eased slightly as the market drifted rather aimlessly.
Now that October is upon us, the market will hopefully be given some direction with orders being placed from the retailers back towards the buyers of raw material.
Until now, as is always the case, but often forgotten, buyers along the chain are simply waiting for something to be sold off the shelf before committing to new orders for the next year.
While growers in Australia, and to a slightly lesser extent in New Zealand and South Africa are receiving returns around 10pc higher than at the same time last year – thanks to a more favourable currency rate the prices in USD, which much of the trade uses, is actually 10pc cheaper.
So wool is relatively cheap compared to prices paid by customers overseas during the past five years and there are no comments coming back from overseas customers complaining about the price of wool.
So why isn’t the price going higher? Simply because August and September are traditionally quiet months where people take holidays, they present the current collections, stock the shelves and await the colder weather and the customers.