Nutrien Ag Solutions sheep farm.

The penultimate wool sale of the year saw strong bidding across the board, as exporters “tucked in” to the large offering, while producers “rejoiced” at the strong finish to the year. This pushed the market to levels not seen since June/July and encouraged sellers to accept the stronger prices resulting in a very low pass-in rate of 5.3%.

The Eastern Market Indicator (EMI) improved significantly for the week, up 35ȼ to 1212ȼ/kg a 3% week-on-week change. The EMI expressed in US$ also rose, lifting 34ȼ to 814 USȼ/kg.  

The West was also along for the ride, lifting prices across all categories as the Western Market Indicator (WMI) finished 2,9% higher week on week, to 698 ȼ/kg. 18MPG in the west improved by 48ȼ to 1645ȼ/kg and 21MPG increased 40ȼ to 1378ȼ/kg.

Fine wool demand in Sydney was particularly strong as 17.5MPG improved 100ȼ to 1825ȼ/kg, 17MPG increased 145ȼ to 1970ȼ/kg and the pass-in rate averaged just 1.8% for Merino fleece lots.

The Melbourne market also saw some strong improvements at the finer end of the offering, with 16.5 MPG improving 121ȼ/kg to 2061ȼ/kg and 17MPG increasing 70ȼ to 1925ȼ/kg.

46317 bales were sold this week, the 2nd highest for the calendar year and 17% higher than the weekly average of bales sold (for the 2023/24 season) which is currently 39503.

Andrew Woods this week provided some analysis on RWS premiums and volumes in merino wool sold at auction in Australia in 2023 (read here). There was always a question as to whether the supply chain would continue to pay the large premiums seen in 2021 and 2022 for RWS-accredited wool. It appears the answer has arrived, and it is a negative one. Whether this has happened because supply has increased, demand is weak in Europe reflecting economic conditions or the supply chain decided it did not want/need to pay large premiums is unclear at this stage. The answer is likely to be a mix of all these factors.

Next week

The wool supply chain will be taking a well-earned break from Sales. Auctions will resume in the new year on the 8th of January 2024.

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Click on graph to expand

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Data sources: AWEX, AWI,Mecardo

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