Australian wool prices were generally in retreat this week at auctions. The Merino sector was most affected as the market drifted daily and failed to find a solid base where buyers were comfortable to support in strength. Not all of the wool market was gloomy as some very positive results were recorded at the finer end of the comeback/crossbred offering. The AWEX EMI (Australian Wool Exchange- Eastern Market Indicator) lost 52ac and settled at 1778ac/clean kg. In US dollar (USD) terms, the EMI was 23usc lower at 1392usc/clean kg, a figure much less affected than the AUD EMI due to the strengthening of the foreign exchange (forex) rate. The AUD v USD was 1.3% higher on a week to week comparison.
Whilst the AUD losses were of some significance, the market held on reasonably well in USD terms. The way the market for Merino fleece behaved is normally indicative of a dormant underlying strength of demand, lying in wait for the establishment of a confidence level or peg in the market. Basically, it was the inferior measurements of sale lots that was responsible for most of the downturn. The better style and strength wools and those lots exhibiting the best test results held on far better, albeit a few cents lower and in limited supply.
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