Wool prices have begun strongly in 2017, with fine and medium wool prices eclipsing five-and-a half year highs, according to Rural Bank and Rural Finance’s February 2017 Australian Wool Update.
The new report, launched by specialist insights team Ag Answers, provides producers and industry with a concise analysis of the Australian wool sector.
According to the report, the Eastern Market Indicator (EMI) rose four per cent in January 2017 to a high of 1,439 cents/kg, and prices are expected to stay above the five-year average as the sheep flock and shorn wool production remain historically low.
Andrew Smith, General Manager Agribusiness for Rural Bank and Rural Finance, said this limited supply – combined with the continued increase in prices for fine and medium wools – meant producers were in a good position for 2017.
“The EMI continues to rise, ensuring the continuation of a two-and-a-half year upward trend in wool price growth for fine and medium wools. This is extremely encouraging for the sector and has provided everyone with a good start to the new year,” Mr Smith said.
“Early weather forecasts for autumn suggest that February to April rainfall is likely to be average for the period in Western Australia but below average in much of eastern Australia so there are challenges ahead. Overall however, it has been a solid start to 2017 for Australian wool growers.”
On the export front, the new report revealed that an increase in exports in 2017 is likely if prices continue to remain strong and the forecast increase in shorn wool production materialises.
The report also revealed that while the wet winter of 2016 delayed shearing across the country, pasture has been abundant and grain prices for supplementary feeding are likely to remain low for the foreseeable future.