“Over six generations you pick up a thing or two”

Like many Ausfine farmers, Peter and Greg Munsie of “Kelvin Vale” in Eastern Australia are sixth generation farmers whose families have been growing wool for more than a hundred and fifty years. However, while their superfine merino is sought by some of the great fashion houses of Europe, Peter and Greg for the most part tend to prefer more casual attire.

Week 02 Wool Market Report

Fri 14th July 2017

OFFERING  Bales offered 46,463   Passed-In 7.7%

CURRENCY MOVEMENTS      AU:USD 0.7705 +1.42%     AU:EUR 0.6731 +0.46%

AWEX EMI AUD 1522 c/kg can   -0.13%    -2 c/kg
AWEX EMI USD 1173 c/kg can   +1.29%    +15 c/kg


Another week at Australian wool auctions whereby the ability of the market to hold firm in the face of usually adverse factors featured prominently. Whilst small reductions did occur on the Merino mid microns at both eastern sale centres the auctions generally produced firm to better prices on the majority of the sellers offered types. 

The AWEX EMI (eastern market indicator) decreased by just 2 ac/clean kg to close out the last “half” of the season at 1522ac/clean kg, which is 16% higher or 211ac better than the close of 12 months ago. In USD terms, the EMI shot 15usc higher to 1173usc/clean kg as the stronger AUD failed to dampen the current strong demand. The EMI in USD closed at 1173usc/clean kg which is 175usc or 17.5% higher than last year. 

The selling week commenced with buyers set to be much keener in their approach to purchasing, but still very much price sensi-tive. Most of the fresh demand appeared to be on all Merino fleece types broader than 19 micron and all Merino skirtings and Crossbreds. The large availability of Merino fleece finer than 19 micron had buyers very wary and the carding sector looked to be in a lull. As it panned out this was very much the order of trend the market immediately tracked to, so the week produced very little to surprise participants. 

The much stronger AUD against the USD by around 1.5% proba-bly took a bit of impetus from the local market, as did the rela-tively large offering of over 46,000 bales, but the underlying strength of demand was the underwriting factor to the firm market results. 

The major buyers of last week continued their purchasing opera-tions much to the similar patterns of last week. The largest local trader/exporter and the largest Chinese indent buyer set the pace and others basically fell into line behind them just picking away at the offering only. As Fremantle joined in to selling though, another large local exporter exerted strength into the better types of the Merino market and completely swamped other orders in the market. This strength continued into the final day and saw a strengthening on most types as other traders pushed to complete outstanding positions. 

Top makers were also far more active this week and this took care of the sale lots containing higher vm and wool descriptions of “off standard” described types. Their stronger activities was also responsible for the dearer (+10 to 20) merino skirting mar-ket, as they looked for machinery fodder as the immediate glob-al supply of wool in general goes into hiatus for at least a month as Australia and RSA (South Africa) remain in sale recess mode. 

The current overseas buying appears to be very much better as to being in tune with the Australian market. In the past, more often than not small sales would be attacked and prices rise to only see a fall in levels as volumes return or larger than expected volumes are offered without much notice. Accurate forecasting of volumes to our customers is vital and that can only help a stable market, and at these levels, most participants should be reasonably satisfied to see the volatility eliminated somewhat. 

Wool sales in Australia are now in recess and will resume in the week commencing 7th August 2017.