Wool prices have suddenly and sharply rebounded this week in Australia, reflecting a need for replenishing stocks, and continuous anxieties over the fall of available quantities, due to the drought in Australia.
Wool prices have this week eventually rebounded in Australia, with the benchmark indicator gaining no less than 54 Aussie cents per kilo clean, at 1,887 cents, and up nearly 3% from the previous week.
The same Eastern Market Indicator (EMI) has even risen 3.7% in US$ terms and 3.9% in euro terms after a rebound of the Australian currency has not dissuaded buyers from ordering.
The only reasonable explanation behind this sudden rebound lies with the fall of prices in the last weeks.
Demand had been delayed over anticipations of continuously lower prices, but could not wait longer, obviously.
At the same time, the lack of supply and the fall of available quantities in the last months has led to a sudden rush on offered fibers.
With such low volumes, the price volatility is very strong.
Merino wool has more sharply increased than other types, with increases of about 80 Aussie cents.
This sudden recovery is far from having radically changed the long-term trends of the past months with wool still heavily dropping in the past three months.
Although prices may be expected to further decline over a weaker demand at retail, buyers may suddenly wish to satisfy their needs, as observed this week.
Source: Emergingtextiles
