8 July 2011
Wool prices finally plunged this week in Australia while remaining firm in New Zealand. Significantly larger quantities were offered for sale in the first week of the new season, resulting in lower prices.
Wool prices this week tumbled in Australia, mostly due to a sharp rise in offered quantities.
The benchmark indicator EMI dropped 40 Australian cents per kilo clean, partly due to technical corrections.
For the first week of the new season (July 2011-June 2012), the jump in wool offered for sale immediately resulted in a downward adjustment.
Demand remained relatively firm after the initial decline in prices.
In US$ terms, the EMI fell back to 1,459 cents, a loss of 43 cents per kilo clean.
The Australian Central Bank refrained from further raising its benchmark interest rate this week, due to a slowdown of commodity exports from Australia.
Commodity prices are everywhere sliding, as China's economic activity is expected to grow at lower pace after Beijing further raised its interest rates in order to trim inflation.
Wool prices may further fall in the coming week as 59,000 bales will be put under the hammer.
This will be the last trading week before a 3-week holiday break.