Wool indicator hits 1822c/kg
Frenzied bidding kept up the price pace early this week, pushing the Eastern Market Indicator even higher.
THE wool market started the year with a bang, hitting more record breaking prices during the first fortnight of auctions.
Frenzied bidding kept up the pace early this week, pushing the market indicators even higher.
The Eastern Market Indicator smashed the record set at the end of 2017 by climbing another 58 cents a kilogram to 1818c/kg by the end of trading last week.
By Tuesday it had zoomed even higher to settle at 1822c/kg.
That’s not only pushing buyers’ anxiety levels higher, but the EMI is close to 400c/kg dearer than this time last year.
Australian Wool Exchange market information manager, Lionel Plunkett, said prices generally rose by 50c/kg to 100c/kg for all types and descriptions last week.
“The entire Merino spectrum enjoyed similar rises, irrespective of style and spec, as buyers fought hard to secure market share in the rapidly rising market,” Mr Plunkett said.
And although some of the heat had left the auction rooms early this week, Mr Plunkett said it was still a resilient market with fine microns firming, mediums just off the pace and broad microns remaining firm.
He said growers were quick to get their wool to market and keen to accept the current prices.
“This has been reflected in another very high clearance rate, over 98 per cent of fleece wool was sold to the trade,” he said.
“Many growers have taken the opportunity to come and see their wool sold, resulting in packed spectator galleries across the country.”
Elders northern wool manager Bruce McLeish said from a technical perspective there was potential for a further 10 per cent rise.
But, he cautioned if the rises happened too quickly the correction could be just as dramatic.
The Northern Market Indicator bounced 67c/kg in last week’s sales to 1908c/kg, then held steady on Tuesday.
Meanwhile, the Southern Market Indicator was about 50c/kg stronger at 1761c/kg last week and kept rising on Tuesday to 1767c/kg.
In the west, the indicator climbed a healthy 72c/kg to hit 1888c/kg last week.
Happy to take advantage of the rising southern market last week were Russell and Suzanne Nield, Benilkie Station, Balranald, who sold a line of fleece wool for an average of $2350 a bale, or 1239c/kg.
“We typically sell most of our clip in autumn, around Easter, but there was a dramatic increase in the market in the spring which opened up opportunities not to be missed,” Mr Nield said.
“We don’t have a crystal ball so the market could continue to rise, however we felt the levels that it is at now was more than adequate for the financial return we were aiming to achieve.”
Mr and Mrs Nield said for their situation, it was not worth taking further risks.
“It is like trying to pick the peak of the stock market - you can’t - you need to try and accept the level that is really good for your product,” he said.
They said the returns they were receiving for their clip were historically the best they had ever been since the boom in the late 1980s.
Mr and Mrs Nield run traditional Collinsville-type ewes on their 37,000 hectare station, situated in the saltbush plains of the western Riverina.
Their ewes produce an average 6.5 kilogram, 19- to 21.5-micron bold white, crimpy fleece. They shear in August, but have a wool shed that can store up to 500 bales enabling them to strategically market their clip.