After rising 6 percent in April, wool prices plunged during the first two weeks of the month after banks in China tightened credit policies, which considerably reduced that country’s buying power. The lower prices at mid-month enticed many new buyers back into the market, driving prices back up to previous levels. Merino counts exhibited particular resiliency.
During the last week of the month, higher prices seemed to cool interest in the fiber, and volume declined again. The Eastern Market Index finished the month down 2 percent to $4.38 per pound. Year-to-date, the wool price index has declined by 6 percent, and is down 5 percent compared to the same week last year.
Wool had been in somewhat shorter supply at end of last season due to drought conditions in key regions of Australia, which took a toll on wool production, driving up prices and forcing many apparel designers and manufacturers to switch from wool to other fibers like cotton, acrylic and rayon.