Australian Wool Market Thrives as Rain Boosts Grower Sellers
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- Published: Friday, 07 June 2024 15:12
Australian wool growers had reason to celebrate last week as rain graced many of the country's wool-growing regions, injecting positivity into the wool auctions. Buyers showed keen interest in all types and descriptions of wool, with a particular focus on lots with lower levels of vegetable matter (VM), indicating a preference for higher-quality wool.
During the week's auctions, which were limited to the two eastern centers as Fremantle remained inactive, the market exhibited strength from the outset. According to the Australian Wool Innovation (AWI), exporters reported follow-up business from previous week's contracts, with demand persisting throughout Tuesday's sales. However, some price resistance was observed, prompting overseas clients to reassess their positions.
As sales resumed on Wednesday, buyers initially gauged competitors' intentions, but it soon became apparent that the market was poised for further strengthening. Small gains were observed across all types of wool, with significant surges seen in the better-tested lots midway through the day's selling. Orders needed immediate fulfillment, leading to notable price increases, particularly for European specification sale lots in the 17 to 19 micron range of Merino types.
The issue of supply is becoming increasingly relevant to overseas mills, with South Africa nearing its two-month break and Australian upcoming auctions facing low volumes. Moreover, the trend of declining wool production, as indicated by the latest Australian Wool Testing Authority (AWTA) figures, presents a significant concern for the industry.
Looking ahead, approximately 33,800 bales are slated for sale next week, with all three selling centers set to operate, according to AWI. The robust performance of the Australian wool market, fueled by favorable weather conditions and sustained demand for high-quality wool, bodes well for growers and industry stakeholders alike. As the global wool market continues to navigate supply challenges and evolving buyer preferences, Australian growers remain poised to capitalize on opportunities for growth and sustainability in the wool sector.