UNCERTAINTY is gripping the Australian wool market in the wake of the US economic woes.
Although the Eastern Market Indicator held firm last week closing down only 1 cent to 858c/kg clean, the bigger concern for exporters was that in US dollars the EMI fell to a two-year low of US677c/kg clean.
Exporter and processor BWK Elders said although the lower Australian dollar allowed modest quantities to be sold to China in US dollars they were at discounted rates.
As BWK Elders noted such dramatic falls in US terms eroded buyer confidence with many mills adopting the strategy of buying 'as little as possible and as late as possible'.
But BWK Elders is also confident the supply shortages should limit any further prices falls.
"Even though mills globally are running at reduced capacity there is still a bare minimum that needs to be covered in order to wind up outstanding commitments or keep machines running pre-Christmas and pre-Chinese New Year," the exporter noted.
Positives from last week's offering of 45,189 bales of which 11 per cent were passed in, was the continuing improvement in the crossbred wools.
"That's because of an increasing demand particularly for the 26-28 micron wools for China's domestic knitwear market," was one comment made to The Weekly Times.
The southern 26 micron indicator closed up 8 cents to 644c/kg clean, while the 28-micron indicator was up 18 cents to 496c/kg clean.
Middle micron wools - 19 and 20-micron - also held their ground, which in turn helped East Gippsland wool grower John Patterson clear most of his clip last week.
Mr Patterson runs a flock based on the Uardry bloodline.
Although pleased his wools sold above valuation, Mr Patterson is, like most of other growers, wanting to see a big lift in the market. Prices are again expected to be fully tested with a relatively large national offering of 57,000 bales for this week.
But in the wake of last week's subdued market, withdrawals are expected to trim the catalogue particularly in Melbourne where 29,900 bales had been scheduled.
