With an impressive gains in the last week the Australian wool auction sales moved downwards by the end of 2nd last week of August 2017. While closing, the EMI settled at 1572ac clean/kg, eliminating 42ac from the record level in the previous week. The EMI in USD fell similarly by 40usc clean/kg.
With two consecutive weeks of rise in the EMI, it went again into the record territory by hitting the price point where the price had a direct impact on the prompt demand and the attitude of the market accordingly. More than 18% of the Melbourne merino fleece and about 12% of the Sydney merino fleece failed to reach growers expectations. According to the weekly wool market report the week 8 of the current season; “Given the prices being offered were just off a record high level, this was a paradoxical figure to most exporter buyers, but perhaps it was more to do with the speed of the market adjustment rather the actual price level that caused such high passed in rates,”
The major orders that were coming from china in the previous week were seen dried immediately at the start of the last week. The showed an extremely careful attitudes to approach sales and most buyers retreated steadily to the level that were more reflective of where the buying demands has appeared in the previous week. While at the same time the local exports who had written forward the order, withdrew and bought cautiously. They were also seemed to be waiting to achieve price levels that were representative of where they had sold.