Wool prices hit new high

January 24, 2018

Wool prices reached a record high of more than 1800¢/kg recently thanks to strong demand from China.

Wool prices reached a record high of more than 1800¢/kg recently thanks to strong demand from China.

Prices have been on the up since October, and Fox & Lillie Rural Victorian wool brokerage manager Eamon Timms said China made up 80 per cent of the market.

‘‘It’s been on a upward trajectory for quite a few months months now and the strength comes out of the demand of the China market,’’ Mr Timms said.

‘‘The pipeline is not very well stocked so they are coming back to the market to replenish and this is causing the market to continually push ahead.’’

Although China’s influence has made it great for growers, India’s ranking as the second biggest importer of Australian wool is in doubt, with eastern Europe its likely successor.

‘‘The clients buying through Fox & Lillie in India were hoping that the market would turn around and come down again and it hasn’t done that,’’ Mr Timms said.

‘‘They have left it very late and the Indians are now well behind the eight ball in terms of wool consumption.

‘‘Our Indian clients will need to bolster their purchases or there is a real chance it could lose the number two ranking for buying Australian wool.’’

Violet Town wool grower Anna Toland said it was a great time to be in the industry.

‘‘It’s lucky that we just sold wool this week ... We sold 14 bales, which averaged 1700¢ gross/kg,’’ she said.

‘‘People are shearing when they wouldn’t otherwise to reap the rewards because no-one knows what’s going to happen.

‘‘I didn’t think it was going to reach this high. Everyone is hoping it keeps going and doesn’t drop.

‘‘We have more to sell in the next couple of weeks.’’

Mr Timms said the market might steady-off in the coming weeks but wouldn’t fall too drastically, if and when it does.

‘‘I think most traders think that the market might have a bit of a hiatus now and given how the market is, there is every chance it will go to these levels if supply lightens up again in three or four weeks time,’’ he said.

‘‘We are not anticipating levels will return to what they were 12 to 24 months ago.

‘‘It really is one of those things that confidence plays a huge part in any market.

‘‘As long as confidence is there, there won’t be a sharp drop but if confidence is not there the sharp drop may come somewhere down the track.’’

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