The softer market in Fremantle last Thursday certainly was a precursor to this week’s sale. The market came back to earth with a thud. Nothing was immune from the correction that we had feared was coming but no-one could pinpoint exactly when. Just as we have seen some big gains over the past 8 sales the losses were heavy: super-fine microns <17 collapsed by +120 cents while other microns out to 22 gave up 70 to 90 cents. This equated to a fall of 44 cents for the AWEX EMI to 1502 (the biggest weekly fall in almost 2 years) while in $US terms the market peeled off by 33 cents to 1151. The better style/spec types <19 micron were virtually unchanged on last sale's quotes while burrier fleece lots took a massive hit up to 100/150 cents cheaper than last week.

Skirtings also took the full force of the buyer pull-back as low VM (<5%), 19 micron and coarser lost 10/20 while the off types with heavy burr and cot and jowl as much as 80 cents off the pace. The superfine (<18 micron with less than 5% VM) lots actually moved ahead in price. Cardings had a quiet sale as a slight fall in CRT and STN of about 10 cents saw the MCI in Sydney drift by only 4 cents. Crossbreds also looked to escape the big carnage of the merino fleece and skirting sector as losses were restricted to a maximum of 10 cents.

After weeks and weeks of a rising market, ever-increasing levels of VM and some difficulty in securing finance, the market succumbed to these 3 factors. Since the market started on its run in early February the gain was 134 cents as against this week’s 44 cent correction.  Medium microns (20 to 23s) are on a similar level to then. Finer than this the difference is 50 to 350 cents to the good, underlying the strength and demand of the fine wool sector.  The size of this week’s fall took all participants by surprise. Growers did put up some resistance to the wind-back in price, the pass-in rate double previous sales, 20% of fleece passed-in in Sydney and 30% in Fremantle. Demand for prompt shipment looks to have been met for the time being as manufactures finally baulked at these new price levels and stopped booking forward contracts. Also on the radar was how quickly volumes can increase by 10/20% from “final figures” on a Friday to rostered volumes the following Thursday, this also easing buying pressure. Many local exporters and mills overseas had expected prices to be maintained through to Easter.  The big national offering of 49,000 bales may again see buyers under no pressure to “buy at best”, as they had sometimes done recently.