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Demand drives wool prices higher

by
November 21, 2017

Strong export demand is continuing to fuel rising wool prices, delivering record highs last week and leaving producers with plenty to smile about.

Strong export demand is continuing to fuel rising wool prices, delivering record highs last week and leaving producers with plenty to smile about.

The industry’s price benchmark, the Eastern Market Indicator, jumped 58¢ on the previous week to register a record high price of 1681¢/kg.

Although Merino wool has largely been favoured by buyers and exporters, gaining 65¢/kg in the week, an Australian Wool Innovation Limited report showed sharp uptake in prices paid for crossbred wool.

Prices registered an 85¢/kg increase in a week of trading, equating to a 20 per cent increase in the value across some micron groups.

Chinese interests have been particularly strong as they have continued to buy up Australian wool, buoyed by Australia’s weaker dollar.

Wool brokerage Woolgrowers Independent Selling Services’ wool manager Robert Ellis said he had been pleased to see strong prices on offer across the board.

‘‘The Merino in particular has been performing well. The crossbred is wavering a little bit but the Merino wool is selling exceptionally well,’’ Mr Ellis said.

‘‘If the market came back a little it won’t come back all that much. There’s enough forward market action to show that this is a level that’s manageable. There’s still strong demand from exports and the current currency is favourable.

‘‘Most growers are happy to take the money that’s on offer, within reason.’’

Although cautious about the cash flow of exporters, who spent almost $97million on wool last week alone, Mr Ellis said there were other questions regarding post-Christmas quality that needed to be answered before it could be determined how long the high prices would continue.

Prices have jumped 400¢/kg on the same time last year while the EMI has added more than 80 per cent in value since 2009-10, with prices increasing from 872¢/kg to current prices of 1681¢/kg.

The prices are welcome news for producer Bill Barlow, who runs an 800ha sheep and cropping property at Rushworth, however, he said he hoped some buyers weren’t being priced out of the market.

‘‘They’re nearly record highs so it’s certainly good times for the industry, especially with the lamb and mutton prices as high as they are,’’ Mr Barlow said.

‘‘Who knows (how long it will last). The experts don’t know and the game can change pretty quickly. It probably wouldn’t hurt if it came back a bit and kept both producers and sellers in the game.

‘‘There’s nothing like high prices to correct high prices.’’

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