Difficult trading conditions negatively affected results at this week’s Australian wool auctions. Chinese business remains the cornerstone to the market and the interest from that nation is consistent but somewhat price sensitive as the appetite for risk is extremely low at present. Minimal maintenance of inventory to execute orders contracted and then to keep factories running seems to be the current modus operandi. 

Demand out of India is flowing to sale rooms but at a measured pace, but it is the uncharacteristic lack of European buying for this time of year that is failing to provide the necessary purchasing competition, particularly at the better end of the selection. This has resulted in many clips being sold to other users that are usually destined for the European manufacturing sector.   

The stronger Australian dollar against the US dollar (+0.8%) also went against local price levels holding or perhaps improving, but the net result was a basically unchanged indicator in export value or US dollar prices. (USD EMI -1). The forex rates continue to be problematic for exporters as just a few points swing up sees a potential loss maker as price offers have to be very sharp in the first instance at present to entice the overseas users interest.

The Merino market continues to be propped up by the local traders whom led the purchasing volumes again this week. China’s largest top maker bought around their usual percentage share of the offering, but all other direct buyers or indenters are still lagging in their normal purchase activity. 

The volume of purchases for the European sector remains low in both value and volume, but with the unfortunate two separate conflagrations over there that is perhaps to be expected. Consequently the losses in the superfine Merino (16.5 to 18.5 micron) segment is being the hardest hit. 

After a few months of good percentage increases in price levels, the crossbred wool types experienced their first general losses for some time. Albeit these losses were minor with just 10 to 15ac lower prices available. The past 3 months though has seen good gains with 28mic 24% higher than July and 30mic adding 28.4% value over the same period.

Volumes rise to 43,000 Australian bales being rostered for sale next week over a Tuesday/Wednesday schedule.