Australian wool prices have been extremely volatile week by week over the past month or so, after having fallen sharply in August. Despite this volatility, wool prices in Australia have recovered well from the recent low point of 1365 c/kg in the first week of September. It is now 230 cents higher than that low point but is still 121 c/kg (7%) below the level at the start of the season. Have we seen the same decline and volatility in wool prices in other countries?
The situation in South Africa is somewhat confounded by the difficulties that country has had with its exports to China since the start of 2019 arising from the outbreak of Foot and Mouth Disease. After an extended break in auctions from the start of June, auctions in South Africa resumed on 5th September with a 28% slump in the Cape Wools Market Indicator (in Rand terms). Prices have since recovered some of the losses and are now 12% below the level at the end of the 2018/19 season. Interestingly, prices in South Africa have not seen the extreme volatility seen in Australia.
Prices for broad Crossbred wool (32 microns and broader) in New Zealand and the United Kingdom remain depressed. After starting the 2019/20 season on a strong note in July, prices in the UK have fallen back again. The British Wool Marketing Board Market Indicator jumped by 18% in the first sale of the season in July but have now dropped away and are 10% below the level at the last sale of the 2018/19 season. In fact, this week’s sale saw the BWMB Market Indicator fall to the lowest level in a decade. In New Zealand, the strong wool indicator has moved in a narrow band of between 271 and 282 NZcents/kg this season, much the same as at the close of the 2018/19 season. This level is low, but not historically low as seen in the UK.
Further details, including a chart showing the trends in wool prices for Australian 18 micron and 28 micron, South African 21 micron, broad wool from the United Kingdom and broad wool prices from New Zealand, are provided in the full edition of the NCWSBA Weekly Newsletter. Available to NCWSBA members.