| Soft Demand sees Wool Market Fall |
|
As the credit crisis continues markets outside the financial sector are starting
to feel its impact. Wool exporters are blaming the credit crunch for a drop in
prices which is pushing many producers to the wall. Over the past few weeks,
wool prices have dropped as much as 10 per cent. Some farmers are able to
stockpile their wool but others are being forced to sell at uneconomic prices.
The fall in price comes as many wool growers are beginning their shearing
season.
The AWEX EMI fell by 75¢ (-8.9%), ending the week at 764¢/kg. This reflected falls of 88¢ (-9.9%) in the North and 64¢ (-8.0%) in the South, with their corresponding Regional Indicators finishing the week at 797¢ and 736¢ clean, respectively. The Western Indicator fell by 61¢ (-7.7%), finishing the week at 729¢. In a three day sale in Sydney and Melbourne, the AWEX EMI fell by 62¢ on Tuesday, by 6¢ on Wednesday and by 7¢ on Thursday. The Western Indicator fell by 53¢ on Wednesday and by 8¢ on Thursday in a two day sale in Fremantle. 57,149 bales were on offer, compared with 55,911 bales last week, of which 33.3% were passed in, comprised of 29.6% in Sydney, 35.5% in Melbourne and 34.6% in Fremantle. Pass-in rates for Merino fleece and skirtings were 43.2% and 26.4%, respectively. 10,239 bales (15.2%) were withdrawn prior to sale and re-offered bales made up 9.6% of this week's offering. The soft demand in the current financial crisis and weak competition continued this week with falls across all micron ranges and wool types. It was not helped by the announcement last Friday that the expected offering had increased by 9,600 bales during the week. |
