AWI trade consultant Scott Carmody said prices were still recovering from a dramatic drop a month ago.
“About four weeks ago, the price plummeted,” he said.
“Demand has slowly been falling but Brexit and (United States President Donald) Trump (and China trade disputes) killed off any confidence,” he said.
“We had a 350 to 400 cent drop-off because of a combination of factors.
“We saw losses of over 10 per cent on a daily basis, which was just ridiculous.
“We got down to 1365¢/kg on the EMI from the 1850¢/kg mark.
“This week (week ending September 27) closed at 1609¢/kg on the back of, not renewed confidence, but restocking off greasy wool.”
Mr Carmody explained the drop in demand was due to a lack of confidence in the global economy.
“The global economy is in a poorer state than 12 months ago,” he said.
“We're not in a recession or depression, people are just being cautious about the future.
“The Trump/China trade disputes, Brexit and the Iran situation are not helping at all.”
Mr Carmody said the dry conditions in northern Victoria and the southern Riverina were frustrating for the Chinese.
“The Riverina is known for its heavy-cut wool,” he said.
“A drop-off in 21 micron wool is concerning for the Chinese market,” he said.
Mr Carmody said another issue coming from the region was dust penetration but despite the unfavorable conditions the region was still producing quality wool.
To see this week's changes in wool prices, turn to page 41.
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