WEEKLY MARKET REPORT 

Week Ending 17th April, 2020

 AWEX Northern Micron Indices Comparison

THE SALE WE HAD TO HAVE??

This week’s sale that was originally rostered as a recess drew for a national catalogue of 21,000 bales but, after withdrawals, 18,000 were offered. The market barely moved as the AWEX EMI lost just 9 cents to fall below 1300 cents to 1292. As the A$ ascended by almost 3 cents (4%) to +64 cents, the market in US$ terms added 31 cents to its value to 828. Fleece movements were minimal as losses in Sydney were up to 10 cents while Melbourne’s market was in the positive by up to 15 cents, bar 20 micron and broader. Skirtings lost about 10 cents while cardings were either side of firm. Crossbreds were the biggest loser of any sector - 10 cents cheaper in Sydney but Melbourne’s 20 to 50 cent falls were the contributing factor to the EMI’s overall fall.

Was this week’s sale a success? Did we need to hold it?? Debate will rage for some time but next week’s volume is now 31,000 bales instead of the 45/50,000 that would have been offered if this week was kept as a recess. Most exporters warmed to the sale and the more manageable weekly volumes that are on offer for the next month which average about 30,000 bales, not too much in this volatile environment. Apart from the unscheduled sale that was held there were 3 on-line auctions trialed. AuctionsPlus held a sale yesterday with 4 brokers offering wool with 10 buyers bidding. WoolQ also held a sale this morning in which we and 3 other brokers participated with a similar number of exporters bidding. Another auction was held using Zoom on Wednesday morning. All three systems are in the very early stages of development and will need some refining of course but were met with enthusiasm from all parties and going forward will be fine tuned to complement the open-cry auction.

The IMF released new forecasts for global economic growth for 2020/21 (like darts at a dartboard). Economic growth is predicted to fall by 3% globally before recovering by 5.8% in 2021 as most developed country’s unemployment rates go to 10/15%. China’s economy could still actually grow this year by 1.2% and by 9.2% in 2021 but Italy’s economy could shrink by 9%. Even with the anticipated rebound next year all advanced economies will be smaller than 2019. China’s retail clothing sales for January/February were back by 33% compared to the same period last year and, in the US, March clothing sales were down by 50% compared to February - massive falls. This downturn, which will worsen, is being seen in retail orders to garment and fabric suppliers with unconfirmed reports of mass cancellations of orders by retailers with some big operators refusing to accept shipments. This is very bad news as consumer demand collapses for not only woolen clothing but whitegoods, electronics and a plethora of non-essential discretionary goods.

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Main Buyers (This Week)