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Wool in doldrums
15 May 2003
Itochu, Australia's largest wool exporter, has warned producers not to count on an early recovery in prices. Itochu blamed the absence of Chinese orders and the rising $AUD for the Eastern Market Indicator falling another 12 cents last week to 950c/kg clean.
China, which accounts for 40 per cent of Australia's wool exports, has been almost out of the market since early April, Itochu's MD said. They seem to be preoccupied with reports of slower economic growth and SARS, and as well as watching the build-up of supplies, especially with the recent high pass-in rates. The current supply is estimated to be more than 500,000 bales and fewer than 50,000 bales have been sold since April 9. At the same time, receivals are running at around 42,000 bales a week.
Itochu wasn't optimistic on an early price recovery. Over the past five weeks the Sydney futures Exchange rates for the 19 and 21 micron contracts across all forward positions has fallen 200-250c/kg clean, whereas the Eastern Market Indicator has fallen only 140c/kg clean.
But Itochu said the market could easily rebound if there's a favourable economic report on a key market such as the US.
Weekly Times, 14/5/03, page 2.
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