2 July 2019

Wool prices are slipping from the past 12 months of market peak

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By Petra Oates, The Weekly Times

THE wool market is coming off its high, but Western District growers Murray Davis and his son Andrew were happy with the prices that are “historically quite high”.

“Historically it’s still quite a good price. Most people would have been more than happy to sell at this price two years ago,” Andrew said.

“In the last 20 years it’s still in the 90 percentile of long-term wool prices.”

The Eastern Market Indicator closed last week at 1715c/kg, 341c/kg lower than last year’s 2056c/kg record high, and down 118c/kg from 1833c/kg last month.

The Davises sold their fine-wool Merino clip at the Melbourne wool store last week for a top price of $15.41/kg. The 11 bales of fleece wool were 17.7 micron, with a yield of 70.3 per cent and strength of 42 Newtons per kilotex.

They averaged $12.76/kg across their 101 bales on offer with no pass-ins, but Andrew said it was about 35c/kg down on their pre-sale valuation.

“It was probably down $3 per kilo average price on last year, but that was near the peak of the market,” he said.

The Davises did not auction their whole clip, which was shorn on their property in Dergholm in March and April this year. They will sell another 80 bales next week.

Andrew said the quality of their wool clip was reflective of last year’s season, which was “quite good” for western Victoria, compared to other areas in the state.

Australian Wool Network auctioneer Russell Macgugan said a build-up of wool supply in China was reducing the international market demand for Australian growers.

“We’d like to think that (the market is) going to steady, but we’re not getting good reports from China. I don’t know if we’ve seen the floor in it yet,” he said.

Mr Macgugan said he hoped the three-week recess in mid-July would lift demand in China and other world markets to stabilise prices.

Murray Davis and his son Andrew at the Melbourne wool store last week where they sold Merino fleece wool and oddments to a top price of $15.41/kg.
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