Due to an increase of drought affected fleeces filtering into the wool market, the Easter States Market Indicator (EMI) took a tumble last week falling by 53 cents to land at 1970 cents per kilogram, clean.
The EMI has now lost a total of 124 cents over the last five weeks and is 146 cents away from the record of 2116 cents achieved in August this year.
Australian Wool Innovation trade consultant Scott Carmody said the inevitable had begun, with much of the selection offered to buyers showing the effects of the drought.
“The significant ‘fining up’ of the average national micron (fibre diameter) is playing havoc on Asian manufacturers expectations,” Mr Carmody said.
“Many Chinese users are saying our current supply is too fine, citing that demand remains strongest and prices influenced predominantly around the 19.5 and 21 micron type segments.”
To highlight what a difference the supply chain, from grower to end user, is seeing from season to season, last week the Sydney market in the Merino fleece room offered an average of 17.6-micron compared to 18.5-micron offered at the same sale last year, whilst Melbourne offered 19.2-micron compared to 20.1-micron last season and Fremantle 19.2-micron this year as opposed to the 19.5-micron of last season.
In addition, the Australian Wool Testing Authority (AWTA) key test data revealed that for the first quarter of the season, that despite the 11.4 per cent overall fall in total volume of Australian wool tested, there was 70.6pc more wool tested that is finer than 16.5-micron.
Results also showed that there was 18.6pc more wool tested between 16.6 and 17.5-micron and 9.1pc more wool tested in the 17.6 to 18.5-micron range.
Yet Mr Carmody said the superfine Merino wool (less than 18.5 micron) area, remains robust.
“European interest was as strong as ever and even in the general declining market, premium pricing by the Italians in particular, is clearly evidenced,” he said.
“Small pockets of Indian buying for better specified batches is also apparent, but when sale lots fall outside the required standards of Europe and India, the price falls “off the cliff”, making up a significant percentage of the lower micron price guides.”
“In some of the 15 to 17 micron range for example there is up to 800ac difference between sale lots in the top and bottom of the quality range.”
He said compared to the week prior, the demand from China was almost exclusively placed in the hands of the indent buying companies, so trader exporters were left largely with just the scraps to compete for.
Last week 36,084 bales were on offer nationally, with 19.4pc of the offering was passed in.
This week has just under 39,000 bales being offered.
Year to date, the national offering is 13.3pc down compared to the same time last season.
