In a week marked by significant forex fluctuations, the Australian wool market demonstrated notable resilience, navigating through a complex interplay
The wool sector witnessed a general price decline across various categories, with Crossbred, Merino fleece, and skirtings all experiencing downturns. However, cardings stood out as a beacon of strength, managing to notch up a few cents in gains amidst broader market contractions, the Australian Wool Innovation (AWI) said in its commentary for week 38 of the current wool marketing season.
Amidst a week of significant forex volatility, the Australian wool market showcased resilience, handling currency fluctuations and trading dynamics effectively.
Despite a decline in wool prices across various categories, cardings achieved a slight increase.
The market’s adaptability was evident, with the EMI in USD and AUD stabilising towards the week’s end.
The USD-denominated Eastern Market Indicator (EMI) promptly reflected the challenging market conditions, dropping 2.6 per cent at the week’s outset, while its AUD counterpart saw a milder contraction of 1.3 per cent. Yet, as the week progressed, the market demonstrated resilience and adaptability, with both the USD and AUD EMIs stabilising and inching higher towards the week’s end, buoyed by robust trading in Fremantle, Western Australia, which recorded the day’s strongest prices.
Strategic buying patterns emerged in the auction rooms, underscoring a market adept at navigating turbulence. While price levels remained a dominant force, there was a noticeable absence of panic, with market dynamics indicating a strategic downward staging rather than a free fall. This adjustment was significantly influenced by strong buying orders from a single Chinese indent, which re-entered the market and injected a dose of optimism, AWI commentary added.
The Australian wool trade’s dependence on China continued to grow, with 85.5 per cent of all Australian wool exports heading to China by the end of December 2023, marking an increase from the previous season’s 82.6 per cent. This trend underscores China’s pivotal role in the Australian wool market.
With nearly 96.7 per cent of wool exports in the raw greasy state, Australia’s wool export profile remains predominantly unprocessed, highlighting the raw material’s global demand.
Looking ahead, the market is poised for another busy week with nearly 50,000 bales set to be offered before the sector takes a brief pause for the Easter break.
Fibre2Fashion News Desk (KD)
www.fibre2fashion.com
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