Demand for Australian Merino wool has gained further momentum with strong price gains across all Merino types at wool auctions this week. Unfortunately the same is not the case for our crossbred wools which faltered once more with prices diminishing on almost all of the offering. All carding wools continued the recent advancement and interest in these types appears insatiable at present with prices well over 1200ac on the indicators. Whilst initially 5ac lower for the first half of the week, the AWEX EMI (eastern market indicator) surged strongly through to the close on the final day to post a healthy 10ac clean/kg rise for the week. The EMI closed at 1578ac/clean kg which is 247ac higher than at the same time last year.
A large proportion of the gains can be put down to the advantageous currency movements against the AUD. With all three of the major currencies used in wool trading depreciating by 1.8 to 2%, an equalising factor was in play, as most Merino types appreciated in AUD terms locally by similar amounts. The market adjustments on Merino wool wiped out the forex advantage, but shows the willingness of overseas manufacturers to keep supply up to their machines at the converted prices. It must be recognized though, that most of the manufacturing world considers Merino price levels to be “high”, particularly at the finest end of the clip.
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