The market almost breathed a sigh of relief this week as it arrived at the traditional winter recess with sales that ended with a positive note. While exporters are unlikely to be traveling to visit clients, a positive finish before a recess is always preferable for writing “new business” and negotiating opening bids when the market resumes.

The Eastern Market Indicator (EMI) lifted by 18¢ this week to close at 1,134¢ despite a stronger Australian dollar which lifted marginally to US$0.694 which influenced the EMI in USD terms to lift 14¢ to 773¢. The Western Market Indicator picked up 17 cents from the previous sale to settle at 1202¢.

Growers offered an increased volume of 35,262 bales this week, and with a subdued pass-in rate of 6.2%, 33,080 bales were sold, 3,800 more than last week.

Analysis by Mecardo (Andrew Woods) this week noted that in 2008-2009, during the GFC, the Merino price ratio to cotton fell from around 7 to 6. The pattern this time around is clouded by a pandemic downturn being compounded on top of an existing down cycle.

Currently the price ratio sits at 6.9, in the long run, the price ratio will recover with a target level of 8 to 9, once the pandemic is brought under control.

Again it was the  Super Fine Merino types (<18.5 micron) who led the way lifting 45 to 70 cents, while 18.5 MPG and stronger merino types were improved by 5 cents, while the >20.0 MPG was +35 cents.

The Crossbred sector after having a reversal of price last week was quoted as “unchanged” this week, while skirtings were followed the fleece section to be 20 cents stronger.

Cardings finally found a footing and posted a 5 cent lift.

Next week

We now enter the traditional winter recess. All of the industry is looking for some stability to emerge when sales resume; this will depend on retail activity showing some sign of post CV-19 recovery.

Have any questions or comments?

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Click on graph to expand

Click on graph to expand

Click on graph to expand

Data sources: AWEX, Mecardo

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