Wool prices have this week dropped in Australia, over a sharp rise of offered quantities. Although prices may further decline in the coming week, they will be later supported by a much tighter supply this season.
Wool price have eventually declined this week in Australia, over a significant increase in offered quantities.
The benchmark indicator has lost 11 Aussie cents per kilo clean or 0.5%, also dropping 11 US cents or 0.8%.
The recent rally has convinced growers to put more wool under the hammer, with weekly offer reaching about 44,800 bales.
The available quantities were also much larger than usual last Wednesday in South Africa after sales had been cancelled in the previous week.
China has decided banning all wool imports from SA, due to an outbreak of foot-and-mouth disease in remote areas of the country.
Fine wool offer in Sydney has limited the decline there, however not boosting prices to higher levels.
Prices will be supported by tighter supply in the remaining of the season.
February testing data reflect a fall of 5.5% from the same month last year.
The decline of wool offered on the auction market has even reached 13.4% so far this season, with a drop of 174,000 bales or about 4 to 5 selling weeks.
Wool prices have clearly continued rising in the past months, especially compared with overall commodity indicator of the I.M.F.
Source: Emergingtextiles
