AUSTRALIAN WEEKLY MARKET REPORT

Comment

Wool auction sales continued this week with 37,000 bales offered and 20,000 eventually sold. The passed in rate increased as the sale progressed.

Our company view is that sales should not be proceeding under these extraordinary circumstances. We have almost the entire global retail sector closed down. The impact this is having down the supply chain is enormous. Access and availability to the necessary cash is not there. The unwillingness of buyers to buy when they have unpaid, undelivered and un-shipped wool on their books with little to no interest from clients is impacting significantly on the market. These are not normal circumstances.

Trial auctions via video link appears a real option for the industry but without the necessary cash to support the wool that is coming onto the market, price levels have been affected.

One option we would like to be considered is to move the 3-week July recess to be effective immediately, then, presuming circumstances are improving at that time, we would sell through July as a compromise. This would help our European business, including clients, who are in lock down now. All things considered, they should be open through July. Or at least the situation will be clearer. This might also encourage some European wool industries to work through August, their traditional summer holiday period.

AWEX Eastern Indicator compared with 27/03/2020

Eastern Indicator

Close: 1287

Change in % -10.75

If you want to learn more about AWEX indicators, visit the official website http://www.awex.com.au

Authentico Index Values

15 Micron

Close: 2369

Change in %: -3.15

16 Micron

Close: 2130

Change in %: -4.05

17 Micron

Close: 1924

Change in %: -4.66

18 Micron

Close: 1726

Change in %: -8.38

19 Micron

Close: 1637

Change in %: -8.39

Authentico Indicator

Close: 1922

Change in %: -5.69

Forecast

AWEX published version 8 of the National Wool Declaration (NWD) last week. Our company is disappointed with the outcome. Rarely has a review gained such attention. This should have highlighted the importance of the NWD and the level of transparency expected by the broader industry right through to retail.  The final document shows little change. NM remains the same and until further scientific research is available on Freeze Branding, they will continue to be sold as NM. This is despite clear commercial focus on ensuring transparency raised throughout the review process. Clarification was sought to improve the accuracy of the CM lots. We are unsure if this will happen. PR has had a name change only to AA. We have woolgrowers who are making best animal welfare decisions, based on scientific research, to include the use of both an anaesthetic and an analgesic but they can’t tell their customers.

We note the high passed in rate. Brokers must advise growers not to offer their wool for sale at the moment if they are not prepared to accept around today’s price levels. We understand and encourage the right to have a reserve price on each lot but the market is under pressure and the price ‘is what it is’ and not helped by large national offerings rostered for sale. It will be interesting to see how many of the 44,000 bales catalogued for next week actually sell. It would make sense to have a smaller offering in order not to unnecessarily spook the market further.

Auction offering – current week

Selling Centres for week 40

Market          Sale          Offered             Sold       Passed In

North                      S 40                     9431                          5278                44.0%

South                     M 40                    22286                       12410               44.3%

West                       F 40                      5996                         3094                48.4%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 41                    T/W                             10280

South                     M 41                    T/W                             25288

West                       F 41                     T/W                              8648

 

If you want to see the complete Wool Sales Roster click here.

EASTERN AUSTRALIAN MARKET REPORT

The majority of the wool offered was passed in as prices fell further.

COMMENT

All descriptions cheaper as further market indecision prevails.

FLEECE

Nil good or best fine wool available today.

All other fleece types 3 to 4% easier but with less than 50% sold, it was difficult to provide accurate or meaningful market quotes.

SKIRTINGS

Up to 4% easier with the better lots least affected.

OPEN TOP

4% easier