Australia’s wool market dipped a little last week, it produced only 33,000 bales. On the second selling day though, it improved and prices began moving upwards again. The market registered a small loss of 6 cents as measured by the EMI, overall. Buyers supported the best superfine wool, which was found in a designated superfine sale in Sydney. The Merino fleece types were generally only down 10 cents for the week.

The overall market tone affected the crossbred wools and dipped, then recovered, while a small supply of carding wools saw prices increase marginally. Prices in USD terms were 28 cents lower because of lower Australian dollar, and prices for European customers closed 26 cents lower over the course of the week. Overseas buyers generally decided to wait and watch because of the falling prices and hesitated to purchase large quantities.

Purchasing managers this year prefer to continue to purchase smaller quantities on a hand-to-mouth basis. For them, the risk is lower, though the cost is higher. This attitude does not allow for the regular forward planning for shipment of greasy wool from country of origin, combing of the wooltop and then further shipment to the spinning factory. Eventually, raw material would need to be secured, or contract prices for delivery at some point in the future by the companies planning price offerings for final garments in the 2016-17 season.

There’s a huge risk given the inherent volatility of the wool market in allowing the raw material price to fluctuate on the open market when the delivery price of the finished product has been contracted. Thus, the market should see the forward buying activity go up when the larger orders are placed in the next couple of months.