As in previous articles Mecardo needs to mention the source of the data used in this article and its availability to anyone with access to a web browser, can be found here. The information provided by the AWTA is a valuable public good, in a world where much data is privatised.
Figure 1 shows the year on year change in volumes by micron category for eastern and Western Australia, for the three months to August. The data is smoothed by using the three month period to iron out variations or “noise” in the data caused by short term factors such as rainfall interrupting the flow of wool from sheep to store or varying numbers of wool sales.
As has been the case for the past year the supply of 16 micron and finer wool continues to shrink, a consequence of good back to back seasons (in the main) following a multi-year drought in eastern Australia. Increased sheep numbers and improved clean fleece weights (which go with broader wool) are combining to boost the main merino micron categories (18 to 20 micron) quite strongly. The broader merino category volumes continue to rise strongly, benefiting from a continued broadening of the merino clip (albeit at a slowing rate). Crossbred volumes are also on the rise, adding an extra issue to an already troubled section of the greasy wool market. Overall the volume in eastern Australia was up 39% for the June to August period and up 41% in Western Australia (as measured by farm bales).
The actual volume in farm bales by micron category is shown in Figure 2 for eastern and Western Australia. In addition the proportion of volume by micron category made up by Western Australia is shown at the top of each column. For example Western Australian volumes accounted for 6% of 15 micron volume and 23% of 19 micron volumes. Beyond 24 micron the proportion of wool contributed by Western Australia was neither here nor there. It is the 18 through 21 micron categories where the Western Australian clip had the largest share, which is reflected in the MPGs produced by AWEX for the Fremantle selling centre.
What does it mean?
The supply pressure which helped lift the micron premiums for fine wool, continues (at a lower level) for sub-17 micron merino wool. The pressure remains in broad merino wool, so the gap between the 21 micron and 19 micron categories is set to remain wide for the time being. Crossbred prices, which continue to struggle, have plenty of supply coming into the market so there is no respite coming from the supply side of the market.
- The supply of wool produced in Australia rose by 40% (farm bales) in the three months to August.
- Sub-17 micron volumes continue to fall, as the merino clip continues to broaden.
- Crossbred volumes are rising quite strongly.
- Broad merino volumes continue rise strongly with the 21 micron volume up 55% for the three months to August.
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Click to expand
Data sources: AWEX, AWTA, ICS, Mecardo