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
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
Change in %: -3.15
Change in %: -4.05
Change in %: -4.66
Change in %: -8.38
Change in %: -8.39
Change in %: -5.69
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.