An incredible rebound across all wool types occurred this week at the Australian wool market auctions. Prices have not just stabilized, but have seemingly, in one week, reversed the trend instantly from bearish to bullish. The slightly positive close to last week was seemingly a signal for our overseas buyers that the market had reached a low point, and new business came from several wool manufacturing nations. The strong forward interest from China carried the most significance for the local exporters, whom had been patiently waiting for that market to flag their intent. The fickle nature that is the wool market bemused participants once again, as the strong rises at local auctions came alongside a significantly stronger Australian dollar. Once again the wool market defies traditional economic logic in relation to the exchange rate, although the greatest market principle of supply versus demand now appears to be in play, as quantities on the market are diminishing rapidly.
Click here to access AWI's Wool Market Weekly Report (pdf 1046Kb).