17 August 2020

Australian Wool market dips below 1,000c/kg and hits eight-year low

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By By Cara Jeffery, NSW Country Hour /

The Australian wool market has slipped below 1,000 cents a kilogram after 59c/kg was swiped from the Australian Wool Exchange Eastern Market Indicator (EMI) this week.


Key points:

  •     The Eastern Market Indicator is now 945 cents a kilogram
  •     The EMI is at its lowest point since 2012
  •     More than 25 per cent of bales were passed in at auction


The EMI is now sitting at 945c/kg which is its lowest point since October 2012.

This also means the EMI is down 552 cents on the same time last year.

There was 33,176 bales offered at auction across the three selling centres in Melbourne, Sydney and Fremantle this week with 25.7 per cent of the offering passed in.

The pass in rate was up 17.5 per cent on the week prior as wool growers remained reticent to selling their wool clip at reduced prices.

Losses were felt right across the board with merino fleece wools losing between 20c/kg and 89c/kg; crossbred wool 26c/kg to 58c/kg; and merino cardings fell by 14c/kg to 30c/kg.
China remains our main wool market

Southern New South Wales wool grower Ross Wells has been growing wool for more than 70 years and said he was surprised that anyone was still buying wool during the COVID-19 pandemic.

Despite the global downturn in retail due to the pandemic, China remains the main market for Australian wool with 78 per cent of the Australian wool clip; followed by India taking 5 per cent; Italy 4 per cent and Korea 3 per cent.

"I'd say they are only buying it because it is so cheap and they will think, 'Let's get in here now', and that's where a lot of it will be going," Mr Wells said.

He hopes the wool market will not get any worse.


"When I first saw on the television with what was happening with coronavirus in China, I sat up on the edge of my seat and thought things are going to get tough and they have just got tougher and tougher since," Mr Wells said.

"It could stand the chance of getting worse.

"I hope that we can, as an industry, continue to sell, but if you can afford to hang out it will help the market and it will help you in the long-term.

"Some people will have to sell because they have had a run of bad years with the season."



Grower predicts 'up and down' prices

Mr Wells has no plans to sell his wool clip anytime soon and has opted to store it.

"We will hang for a fair while more — for the good of the industry for more than any other reason," he said.

"I hope there is enough people that will do that so we can maintain a level in the price during this COVID situation.

"Once the price goes up a lot of people want to sell, so in it all comes and the price goes up and down.

"I think that's the sort of thing that we are going to face for a year or two."

Despite the plummeting wool price Mr Wells remains optimistic about the future for the fibre.

"We have a season and it's pretty widespread," he said.

    "I think, because wool is such a favoured commodity over the other fibres, that it's going to come good after the pandemic."

Next week it is expected that only 22,436 bales will be offered between Sydney and Melbourne auctions as Fremantle will not have a sale.

Ross Wells believes it will take a long time for the wool market to bounce back from the impact of COVID-19.
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