Wool market gains 7c to close on 1943c

TURNAROUND: The Eastern Market Indicator rose by 7 cents, and 12 cents in US dollar terms last week.
TURNAROUND: The Eastern Market Indicator rose by 7 cents, and 12 cents in US dollar terms last week.

As is often the case before a recess, the market closed on a firmer note as buyers sought to keep the production flowing.

In local terms the Eastern Market Indicator (EMI) rose by 7 cents, and 12 cents in US dollar terms.

Again, the better style merino fleece gained solidly, while the poorer wools were neglected in comparison.

Crossbred wools continue to climb, especially the finer edge, which are no doubt being used in blends with merino types to 'create' a cheaper and coarser version of the traditional Type 56 and Type 58.

The quality of the Australian offering has perhaps turned the corner, with a higher proportion of better category types available last week.

Only those with access to high quality scouring machinery, are comfortable filling containers with lower yielding types. Others are forced to average something reasonable in terms of scouring yield to avoid a penalty tariff, thus the enthusiasm for better yielding crossbreds to add to the mix.

There is no doubt quantity is on everyone's mind, with a reasonable volume forecast of 42,000 bales available immediately after Easter, but then presumably nothing above 40,000, and perhaps less than 30,000 in some weeks, for the remainder of the season.

With South African wool still locked away, the pressure on supply will be ever present for the next few weeks.

There are currently around 40,000 bales lying in warehouses in South Africa, having been purchased by optimistic Chinese traders, but the only sure thing they have at present is mounting interest bills.

There have been no further outbreaks of FMD in the Limpopo Province, but a porous border into Swaziland where cattle are traded freely, is making the necessary certification difficult.

As soon as the government officials can satisfy their Chinese counterparts everything is secure, there is a withholding period to complete before wool shipments may resume, which at present indications would see a resumption of trade in late June or July.