The Australian wool market continued to ease this week despite a substantially smaller national offering, suggesting global markets are still seeking a price level at which normal trade can resume. Buyer selectivity and increasing grower seller resistance were the key factors shaping the market.

The market opened a general 5ac lower on Tuesday, with demand continuing to support better style sale lots carrying the more favourable length and strength measurement results.

In Sydney, superfine and spinner-style Merino wool attracted strong competition, with selected lots trading as much as 200ac above the more average descriptions.

Fremantle recorded the largest decline, but this was due to prices adjusting to the Eastern Week 16 close level, with Merino categories falling up to 60ac.

Spot pricing pressure increased on Wednesday, when the EMI lost a further 14ac. There was considerable variation within the superfine offering. Premium European style and specification sale lots remained comparatively well supported, particularly certified clips, while non-Euro superfine types and standard top making wools bore the brunt of the depreciating levels.

Grower resistance became a more prominent feature as prices weakened. The national pass-in rate rose from 7.5% on Tuesday to 19.2% on Wednesday, while Southern Merino fleece recorded a 26.5% pass-in rate on the final day.

Low inventories across the supply chain, constrained raw wool supply and wool’s compelling natural fibre story provide underlying support for the market. However, macroeconomic uncertainty and cost of living pressures continue to drive resistance to higher prices, while the potential for rising interest rates in key markets remains a concern.

31,398 bales are forecast for next week, with the auction series again a test of whether current trading and processor demand can absorb a slightly higher supply without further downward price pressure.