Fed: Wool prices drop two per cent on first week of auctions

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Fed: Wool prices drop two per cent on first week of auctions

CANBERRA, Aug 1 AAP - Wool prices slipped two per cent in the first week of auctionsin almost a month.

The price fall brought the eastern market indicator down to 883 cents per kilogramand the western indicator to 869 cents per kilogram.

Australian Wool Industries said the fall was not unexpected, with key buyer China largelyout of the market.

But there were encouraging signs, with finer quality wool actually improving.

"In a welcome sign for fine wool growers, this end of the market fared best duringthe week," it said.

"Better types were also in demand, while Chinese types fared less well."

Wool prices collapsed 20 per cent in May before recovering slightly last month.

Wesfarmers Landmark said the volatility of the Australian dollar was also hurting prices.

It said there was a good chance of prices remaining stable at next week's auctionswhere around 53,000 bales will be up for sale.

"Prices are expected to remain firm next week providing the Australian dollar remainsstable with levels supported by the lower auction offering," it said.

AAP sw/mk/jlw

KEYWORD: WOOL