CONCERNS are rising that the wool price surge earlier in August inflated the market prematurely, lifting it before the world economy is ready to sustain a true price recovery.
As a result, the eastern market indicator (EMI) fell by 1.3pc at auctions this week, ending its price surge over the previous three weeks.
But, hopefully, that will be seen as a temporary hitch before a longer-term recovery.
Rodwells Victorian wool manager Michael de Kleuver, for instance, expected the price rally to subside this week.
“The run has been pretty hard since the first day of the break so it was always going to take a breather,” he said.
This view was shared by Platinum Agribusiness analysts.
“The market was probably due for a correction as the (hoped for) recovery is still too much in its infancy to justify big moves upwards,” its weekly report said.
“Longer term we remain fundamentally bullish.”
Despite the run of disappointing price falls for wool this year, Mr de Kleuver said a positive sentiment was evident.
“Gloom is residing and because wool has a long lead time buyers are thinking about wool garment manufactures in the months to come,” he said.
“Obviously there are concerns of supply – we are coming into spring and there has not been a sale until this week above 40,000 bales."
Just over 46,000 bales, however, are expected to be offered nationally next week, but that includes the first Newcastle sale for the new wool selling season which started in July.
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