THE Australian wool market finished 3.9pc lower, on average, at sales in Sydney and Melbourne this week on the back of softer demand and a 2.9pc further rise in the $A-$US exchange rate.
The eastern market indicator (EMI) fell by 30¢/kg, ending the week at 753¢/kg.
In a two-day sale in Sydney and Melbourne, the EMI fell by 33¢/kg on Wednesday, when the US exchange rate nudged US82c - 6.2pc above last week’s wool sales close.
Then the EMI fell by 3¢/kg on Thursday when US exchange rate eased back by 3.1pc.
This week's further price slide follows a 3.5pc fall in the wool market last week.
The Australian Wool Industries Secretariat (AWIS) says this week’s market was again dominated by this rising $A-$US exchange rate boosted by the Reserve Bank’s decision on Tuesday to leave the official interest rate unchanged, the 0.4pc growth in Gross Domestic Product (GDP) in the March Quarter and strong Australian export figures.
As is often the case, AWIS says the fall in the US exchange rate on Thursday from Wednesday’s peaks, however, was not accompanied by a equivalent rise in the EMI at auction in $A terms.
AWIS points out that, while the 30¢/kg fall in the EMI is not good news for wool growers, the fall when expressed as US6¢ is "a better representation of the global market".
Performance of the regional indicators at auction were:
• Sydney’s northern indicator: down by 31¢/kg, to 775¢/kg.
• Melbourne’s southern indicator: down by 30¢/kg in the South, to 734¢kg.
• Fremantle’s western indicator remains unchanged, at 769¢, as there was no sale in Fremantle this week.
Nationally, 27,964 bales were offered, compared with 40,111 bales last week when all three regions sold.
Reflecting grower dissatisfaction with the sharp drop in prices, 22.4pc of the offering was passed in nationally - including 26pc of fleece wools passed in.
AWIS says there was a more even distribution of price falls in percentage terms this week than was seen in the last three weeks when the fine wools fell by a greater amount than did the medium and broad wools.
Buyers for China dominated sales this week again, followed by support from India.
Sales will be held in Sydney, Melbourne and Fremantle next week, when 35,834 bales are rostered for sale.
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