By Madelene Pearson
Oct. 30 (Bloomberg) -- Wool prices in Australia, the world's largest producer and exporter of the fiber, posted the biggest monthly fall on record as the global credit crunch and economic slowdown slashed demand.
The Eastern Market Indicator dropped 8 cents to A$7.38 ($5.04) a kilogram today, taking the month's decline to 14 percent, David Cother, wool services manager with the Australian Wool Exchange said. That's the lowest price since Oct. 10, 2006.
``Demand is definitely weak, it's very weak at the retail end,'' Stephen Hill, trading manager for the wool unit of ABB Grain Ltd., said by phone from the company's Adelaide headquarters. ``Textiles are probably considered a luxury item, so it's one of the first things you don't spend your money on.''
Buyers are struggling to get the funding needed to buy the fiber and consumers are cutting purchases amid a global slowdown. The U.S. and China announced interest rate cuts yesterday, seeking to stave off a sharp economic decline.
``I'd like to think we are close to the bottom,'' ABB's Hill said. ``As soon as sentiment changes, that could very quickly put a base and make the market rally a little because there is very little wool in the pipeline.''
There are no wool auctions in Australia tomorrow.
To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net
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