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Insights June 2021

7 June 2021 |Wool
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Insights June 2021

7 June 2021 |Wool
The June update provides an analysis of production and pricing trends for Australian wool producers.

Commodity Overview

  • The Australian wool market saw a third consecutive increase in prices at the first auction of June.
  • Offerings are expected to decline, fuelling competition amongst buyers.
  • Demand from China and Europe will help keep prices high as both markets look to increase inventory.

The Australian wool market continued to a run of positive price gains in May. The Eastern Market Indicator (EMI) currently sits at 1,343 c/kg, well above this time last year. The first auction for June produced price gains for all microns. Finer wool benefitted from steady Chinese demand, in addition to a recovery from Europe and India. Currency movement remained stable, while a smaller offering increased competition between buyers. Wool that would usually be discounted as inferior product was readily snapped up by buyers desperate to fill orders.

Wool volumes are expected to tighten against a backdrop of increasing demand from China and Europe. This scenario will likely lead to further price increases across all microns. A stable Australian dollar will have limited impact on price. The pace of COVID-19 vaccinations will continue to underpin demand from both China and Europe. Millers in both markets have sensed an increased level of demand. This signals that it is time to re-stock inventories ahead of the Northern hemisphere winter.

Graziers can expect a wet June across much of the country. The forecast is positive from a soil moisture and feed perspective. In addition to animal health problems arising from waterlogged soils, there will be an increased risk of wind chill impacting lamb survival.

 

 

 Sources: Australian Wool Exchange, Australian Wool Testing Authority

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