Wool market as ‘broad as it is erratic’ thanks to global currency volatility and smaller national offering

Buyers’ appetite for Australian wool will be tested this week, with a smaller national offering and global currency volatility — thanks to US President Donald Trump — meaning prices could continue to rise. A total 35,699 bales will be offered at the nation’s three major woolstores — in Perth, Sydney, and Melbourne — on Tuesday, April 9 and Wednesday, April 10. The figure is well down on the 36,473 bales sold at last week’s sales on April 2 and 3, with a pass-in rate of 5.1 per cent as currency fluctuations affected market dynamics. Sales were particularly buoyant at the Fremantle Wool Selling Centre last week, with the Western Market Indicator surging 14¢/kg to 141¢/kg on the back of strong buyer sentiment. Fremantle led regional gains, with all wool categories showing strong performance, notably the 18 and 18.5-micron categories, which both rose by 35¢ to standout levels. Eastern States markets experienced more modest increases, with Sydney’s 19-micron wool climbing 11¢ to 1561¢, while Melbourne’s 18-micron category was the highlight, rising 7¢ to 627¢. A weaker Australian dollar on the first day of the sales saw the Eastern Market Indicator drop US8¢, before a stronger Australian dollar pushed it up US9¢ one day later. Mecardo wool analyst Cameron Timmins-Smith said the trade had been disrupted by Mr Trump’s “Liberation Day”, which implemented a 10 per cent tariff on all exports to the US from Australia. “It presents the trade with a lot of short-term uncertainty, particularly on the currency front,” he said. “Buyers looked to make the most of the current moment, which helped to drive demand.” Mr Timmins-Smith said the combination of fewer bales and global currency volatility would be a “good test of buyer appetites” at the upcoming wool sales. Southern Aurora Wool partner Mike Avery echoed this sentiment, saying last week’s sales had produced a “solid result” considering the “dark clouds gathering offshore”. “Uncertainty prevailed ahead of the Trump Government announcement on tariffs,” he said. “How this would play out was difficult to predict. The reality was as broad as it was erratic.” Mr Avery said the market was in a volatile moment, with consumer confidence certain to be dented, but how Australian woolgrowers’ key markets would react was “unknown”. “How the US will respond to the wave of criticism is even more arbitrary,” he said. “Supply will remain tight, so hopefully wool prices will fare better than others. “To quote British historian Simon Schama: ‘Global economic crashes have been caused by a variety of problems, some more unavoidable than others, but this is the first one ever to be brought about by sheer doltish stupidity’.” Australian wool prices have steadily climbed since September, with the Eastern Market Indicator rising from 1091¢/kg to 1249¢/kg in the past seven months. Wool prices are now at their highest point since May 2023, when the EMI reached 1310¢/kg, but are a long way off the 2000¢/kg records achieved in mid-2018.