In A$ terms, the Eastern Market Indicator (EMI) decreased by 20 cents at 770 cents per kilo, being down 7 US cents at the same time to 562 cents per kilo. .
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Confronted with a new increase in the Australian dollar, foreign buyers often preferred postponing orders.
The Australian currency reached a six-year high, closing the week above the 72-cent level. It rose about 4.17% in the past four-week period compared with the US dollar, being up no less than 27% this year. .
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Australia central bank actually fears a rebound in domestic inflation although prices were only up 2.6% in the third quarter. .
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As a consequence, the central bank official cash rate was last week raised from 4.75% to 5%, further boosting the national currency. .
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The US dollar fell at the same time after US trade deficit officially widened in September. In absence of any recovery in retail consumption, the currency factor now dominates the wool market. Compared with a year ago, wool prices fell between 26% and 34% in A$ terms, depending on micron ranges. They declined between only 5.5% to 14.87% in US$ terms.
Since their currency is pegged to the US dollar, Chinese processors remain cautious and are working on hand to mouth basis, as reported by wool broker Wesfarmers Landmark. .
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The share of fiber blends in wool textile production is now rising as a consequence of the relatively high level of wool prices in US$ terms. .
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This week prices were also depressed by the low quality in offer, following last week sales of fine wool in Newcastle. .
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All micron categories were affected. Prices are expected further sliding in the coming week. With the Christmas break now approaching, however, “there will be shipping commitments which nee to be met,” the Woolmark predicts. .
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In addition, an improvement in China wool business is increasingly reported. Wool apparel retail sales would have rebounded this summer, up 6% in August from the same month last year and growing 8% in the first eight months of the year.Prices also again fell this week in South Africa where the rand continued rising. Cape Wool indicator was down 2.9% to 28.82 rand per kilo clean, now 40% below year-ago level. .
The indicator declined 2.6% in US$ terms at 419 cents.
Prices also fell in New Zealand where the medium indicator (25-31 microns) was down 28 cents to 567 cents (- 4.9%) on Thursday in Napier. The strong indicator (32-41 microns) fell 8 cents to 399 cents (- 2%). .
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In US$ terms, the two indicators were down 3.3% and 0.4% respectively after the New Zealand dollar further rose.
Date:11/18/2003
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