In a milestone week for wool, all four wool auction centres closed at 800¢/kg or above this week for the first time since early October, although the market rose by just 0.5pc at sales in Sydney, Melbourne and Fremantle
But that new rise, coming on top of the ongoing gains in most weeks since March, was enough to push wool through the critical barrier at all centres.
It's revitalised the wood market, but many woolgrowers say they still need prices to reach 900c/kg before the ongoing decline in wool output ends, and turns up agan.
The benchmark eastern market indicator (EMI) this week rose by 4¢/kg (+0.5pc), to 834¢/kg, according to the Australian Wool Industries Secretariat (AWIS).
The market has held up surprisingly well in the face of the latest surge in value of the $A, which has made wool more expensive for most of our customers.
AWIS, for instance, calculates that the EMI has now risen by 15pc at auction in Australia since the upturn in the market at the beginning of March.
But the EMI has now risen by 35pc in terms of US currency and it's up by 25pc in euros since early March, emphasising the underlying strength of the demand for wool, despite these much higher prices for our major export customers.
AWIS says this was another solid week, with further gains in the EMI, but at a more moderate rate than the rises of 7¢/kg and 33¢/kg seen in the last two weeks.
The market was stronger in the medium and broader types than at the fine end, as has been the pattern for the last few weeks.
The strength of China in the market has seen demand for the “China types” at stronger levels than for others, including the better types, AWIS says.
Buyers for China dominated sales this week, followed by support from India.
In a two-day sale in Sydney and Melbourne, the EMI closed unchanged on Wednesday but rose by 4¢ on Thursday as the $A eased after Wednesday's highs.
Performance of the other regional auction indicators were:
• Northern indicator (Sydney), up 4¢/kg, to 859¢/kg.
• Southern indicator (Melbourne), up 4¢/kg, to 814¢/kg.
• Western indicator (Fremantle), up 5¢/kg, to 800¢/kg.
Nationally, 40,912 bales were offered, compared with 41,681 bales last week. The pass-in rate of 8.4pc was up on the last two weeks, reflecting some grower dissatisfaction with the smaller rise in this week’s EMI.
The US exchange rate fluctuated considerably during the week.
After rising sharply earlier in the week, it closed on Thursday at US75.23¢, down marginally since the last sale.
The exchange rate against the euro fell by 2.1pc, after six weeks of rises, to close at 55.45 euro cents on Thursday night.
So, when looked at in other currencies, the EMI this week rose by just 0.3pc in US terms, but fell by 1.7pc in euro terms, when compared with that of the previous sale.
Sales will be held in Sydney, Melbourne and Fremantle next week, when 43,596 bales are rostered for sale.
Present estimates for the following two sales are 39,110 and 30,300 bales (only Sydney and Melbourne selling), respectively, an increase of 2.8pc over the three sale period when compared with last year's.
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