Chinese demand and drop in Aussie dollar see wool prices lift
Mar 19 2015
Australian Wool prices have seen a decent rally in the past two weeks, with the Eastern Market Indicator reaching 1101 cents a kilogram – its highest point in two years. Fine wool has seen the largest price increase, with 17-micron wool making 1388 cents a kilogram, up 94 cents for the fortnight.
Cardings made AU 880 cents a kilogram, which is believed to be a record high price. Stronger wool is also doing well with 30-micron wool making 765 cents a kilogram, the most the category has made in 60 years.
Elders northern wool manager Bruce McLeish was quoted by ABC Rural to say that the 60-cent rise the market in the past two weeks had been driven by the lower dollar and rising demand from the Chinese.
“We’d have to say, at the end of the day, that China’s long awaited recovery appears to be gaining some strength, confidence does seem to be slowly returning to consumers over there and there’s a flurry of domestic orders in the sweaters and other garments,” he said.
“We’re actually pushing some wool out the other end and the mills are having to restock.” Yelarbon sheep and wool producer Leith McColl managed to get her sheep shorn late last year before the rain started. “Perfect timing, I got the wool trucked out and the rain started that night,” she said.
The 37 bales of medium 19.8-micron wool will be sold in Melbourne this week. Ms McColl was confident the strong prices would continue, due to the time of year. “I think the wool market is always cyclical, it always rises at this time of year,” she said. “What we really need is for the top and the bottom of the cycle to close up, so the bottom of the cycle is not so far away from the top.”
It has been a tough year to produce wool, with dry weather reducing lambing rates and wool yield and quality.”I’ve had an appalling year. This is probably my worst shearing ever probably with really light cuts,” Ms McColl said. “I have a lot of old ewes and they’ve had two very, very dry years and they’ve done amazingly well to survive and have lambs.They’ve raised good lambs, but they’ve struggled and you can see it in the wool.”
Ms McColl also said the humidity experienced at the end of last year had also affected the wool. “They went from November – the wool looked fantastic, lovely bright white wool – and by the time shearing came it was creamy. It wasn’t bad, but it had been affected,” she said.
The Australian Wool Production Forecasting Committee (AWPFC) has forecast production in the 2014/15 season at 334 million kilograms greasy, down by 2 per cent from the 2013/14 season total of 341 million kilograms.
Regionally, the committee forecasts wool production in 2014/15, compared with 2013/14, will fall the most in Queensland (-31.9 per cent ) and Western Australia (-4.1 per cent ), while production in Victoria (-1.7%) and Tasmania (-0.6%) will decline to a smaller degree.
Source: ABC Rural