While European demand was focussed on the better specified fine merino fleece types, especially if they were accredited to RWS, Chinese topmakers were supporting the bulk of the market. The topmakers need to buy in order to keep machinery utlilisation levels up and keep their employees in a job. Reports continue to indicate that getting hold of workers, let alone trained workers, in China is a problem.
Vegetable fault continues to be very heavily discounted, offering topmakers who are skilled enough some good buying opportunities. Italian processors are active in the market partly in anticipation of falling supplies of fine wool due to the good seasonal conditions in many regions since early 2020.
It is not always easy to match the vagaries of the supply of an agricultural commodity with the needs of a supply chain. In this case it is buy the raw material when it is available. The market still faces a few nervous weeks as it transverses through the early southern spring period.
It was another good week for fine wool with good specifications, even better if accredited to RWS. The supply of suitable RWS accredited wool is limited, so it seems demand has simply outstripped the available wool on offer hence the strong premiums.
Like most apparel fibre prices, the 19 MPG peaked late last season and has since eased. The good news is that prices steadied this week, not following the path lower which it did at this stage of the season in the past two years. In US dollar terms the 19 MPG is trading at levels the market was at immediately before price plunged in March 2020 due to COVID. In effect prices are back to what looked to be the bottom of the price cycle before the pandemic dragged commodities into a another unexpected down cycle.
The 21 MPG held at the US900 support level and now looks likely to drift along in a price range for the time being (around AUD1250 cents), while the market works its way through this early part of the season when the supply chain is waiting for some clear demand signals.
Composite ewes make up about 10% of the Australian ewe flock, which means they account for about 40% of the non-merino ewe flock which in turn means that some 40% of the crossbred clip is from composite sheep, which is variable quality.