Falling trend on Australian wool market

Australian wool down 2.9 percent on week The Australian wool market finished 2.9 percent lower, on average, at sales in Sydney, Melbourne and Fremantle this week. The AWEX EMI fell by 25c (-2.6 percent), ending the week at 931c/kg clean.
This reflected decreases of 19c (1.9 percent) in the North and 30c (-3.2 percent) in the South, with their corresponding Regional Indicators finishing the week at 963c and 905c clean respectively. The Western Indicator fell by 36c (-3.7 percent) over the two week period since the last sale, finishing the week at 944c.
In a three day sale in Melbourne and a two day sale in Sydney, the AWEX EMI fell by 18c on Tuesday, by 17c on Wednesday and increased by 10c on Thursday when the level of competition lifted sharply after reports of good trading activity the previous night.
In a quirk of the EMI calculation when only one centre sells, the fall of 18c on Tuesday did not reflect the true fall of 33c in the Southern Indicator. The Western Indicator dropped by 53c on Wednesday after the two week break and increased by 17c on Thursday.
For the second successive week an unexpected increase in the estimate of the number of bales available for sale in the first sale of the new season has been accompanied by a sharp fall in the market on the first day of selling, with the Market Indicator falling by 25c last week and by 33c this week.
When combined with the easing seen in the previous two weeks the market has moved back to pre-Easter levels. Nevertheless, those prices were seen as very good at the time and are well above those of earlier in the season, as seen in the following paragraph.
When compared with the start of the upward movement of the market in October, the EMI and the Northern, Southern and Western Indicators are up by 190c (25.6 percent), 197c (25.7 percent),185 (25.7 percent) and 227c (31.7 percent), respectively. 19 to 23 micron average AWEX Micron Price Guides (MPGs) are up by 211c to 234c clean over the period and by 196c for 24 micron wools. At the fine end, the changes are 87c for 16.5 micron wool, 134c for 17.0, 174c for 17.5, 154c for 18 and 199c for 18.5 micron wool
53,871 bales were on offer, compared with 26,289 last week, of which 16.7 percent were passed in, comprised of 13.9 percent in Sydney, 14.5 percent in Melbourne and 25.4 percent in Fremantle. Pass in rates for Merino fleece and skirtings were 19.1 percent and 16.2 percent respectively. 3,712 bales (6.4 percent) were withdrawn prior to sale and re-offered wools made up 10.4 percent of this week's offering.
When looked at in other currencies, the AWEX EMI fell by 25c ( 3.1 percent) in US terms and by 21c ( 3.5 percent) in Euro terms when compared with the previous sale.
The changes in the EMI in the US and Euro currencies since mid October are now 230 USc (+41.5 percent) and 140 Euro cents (+31.7 percent). The EMI in US terms (784c) is 89c above the 2002/03 peak of 695c.
As mentioned above, the market came off sharply on the first days of selling, with the greatest falls again occurring at the fine end where average MPGs came back by 40 to 80c. Medium micron average MPGs eased by 20 to 60c. Increases were seen across the board when the market recovered on Thursday. Skirtings, oddments and crossbreds were all affected by the drop in the market. The main buyers were for China with a strong buying presence from buyers for Italy among the fine wools on Tuesday and Wednesday.
Sales will be held in Sydney, Melbourne and Fremantle next week, when 76,549 bales are currently rostered for sale. This will be the last sale before the three week recess.