This week’s Australian wool auctions experienced tougher market conditions as buyers adopted a cautious approach, waiting for clearer demand signals. Despite low volumes and Western Australia not participating in auctions, prices in the Merino sector decreased by around 0.8%. Skirting types maintained their values while cardings saw a slight drop. On the other hand, the crossbred sector saw a gain of 10 cents, according to the Australian Wool Innovation (AWI).
Manufacturers and traders may have held off on purchasing to avoid spooking the market. Executing contracts in a limited supply situation could have driven prices up and resulted in losses. The strategy might have been to wait for larger volumes to hit the market in the new financial year before making purchases to maximize selling opportunities.
The Australian dollar’s strength against major trading currencies played a significant role in price depreciation this week. Reports suggest that the Reserve Bank of Australia may delay interest rate cuts compared to other G10 central banks, further bolstering the AUD. Next week, all selling centers will be operational, offering 40,000 bales and potentially revealing more about market conditions and future trends.
