WEEKLY MARKET REPORT 

Week Ending 16th August, 2019

 AWEX Northern Micron Indices Comparison

HORRENDOUS!!!

One word could best describe this week’s wool sale, ”HORRENDOUS” as all sectors of the market plummeted to have the AWEX EMI at its lowest level for 2 years, now at 1513. The fall was 163 cents for the series, 9.7%, which is the largest weekly fall since 2003 with the biggest opening day fall in 11 years. Finer types < 19 micron fell 100 to 150 cents while 19.5 and broader averaged exactly a 200 cent shellacking. Skirtings gave up 150/200 cents, crossbreds were back by 130 to 160 cents while cardings reversed last week’s gains to fall 20 to 80 cents depending on type. The national pass-in rate was 36% - the highest for 16 years with 17% withdrawn. The only exception to the massive discounts were the sub18 micron best topmaking/spinners style where reductions looked to be 40 to 70 cents and most non-mulesed types increased their premiums dramatically with some “NM” lots  commanding 60 to 400 cents clean over the indicator price as buyers report more and more enquiry for NM wool. Prior to recommencement of sales the premium was in 50 to 20 cent range. Our NM wools came from Gilgandra and Binnaway to Yeoval, Wellington and Gulgong that were paid handsomely for their wool.

Again the predicament for the wool market was external factors as global stock markets shuddered on the forecast of global recession on the horizon; the ongoing unrest in Hong Kong along with Brexit; the tariff wars and tension in the Persian Gulf which has most Western governments nervous. When this happens consumers become cautious and stop spending money thus slowing economic growth. Some good news is the US decision to delay some new tariffs from September to December following pressure from retailers fearing a negative impact on their turnover but, for Aussie wool producers, woolen clothing imports from China wasn’t granted the extension - this decision adding to Chinese processors’ concerns for orders for their Autumn/Winter season.

The Australian wool production forecasting committee met on Wednesday and, to no-one’s surprise, their forecast was down 5% to 285mkg for this current season due to ongoing drought resulting in less sheep (record prices for lamb and mutton) and low lambing rates that are hamstringing growers from increasing flock numbers. Buyers have reported sporadic volumes of business being done with the market soon to find a level.

Main Buyers (This Week)