Wool market stable in a shaky world

2nd April 2026

MOST of the price rise on Tuesday was currency related but with all the other fuel and fertiliser price increases currently making life more difficult on the land a favourable currency rate for those selling wool this week was very welcome.  With such a favourable currency rate exporters were over-run with enquiries and were able to sell freely until some had to slam the bag for fear of not being able to buy enough wool the next day.  The overall market indicator, the AWEX EMI increased by 20 cents, although drilling down to a more relevant 19-micron price saw a price increase of 30-40 cents in the east, and 70 cents in the western market in local currency terms.  In USD the EMI actually decreased by seven cents for the day.  Similarly in Euro terms the increase was a more benign 5 cents, although the wools which most European mills purchase either in greasy form or as wooltopsaw an increase of 30 Euro cents.

On Wednesday following the overnight sales the indent operators in particular stepped on the gas and outmuscled the larger topmakers to dominate proceedings.  A further 42 cents was added to the EMI in local currency terms, and the strength of the market was very clear with the USD price also rising by 39 cents for the day.  Again the 19-micron MPG reflected the true market tone as it rose by 99 cents in Sydney, 53 cents in Melbourne and 44 cents in Fremantle.  All of the merino indicators from 16.5 through to 21-micron rose strongly as buyers scrambled to fill orders and make sure that nothing was left uncovered over the Easter Recess.  Crossbred wools were a touch dearer but the week was all about merino as perhaps it should always be.

So the correction which everyone agreed was warranted and necessary to allow a bit more correlation between greasy wool prices and wooltop or yarn prices seemed to settle around the 25% of the original price increase since October last year.  A lack of supply will be in the forefront of everyone’s minds after the trade returns from the Easter break.  Only the brave will sell wool which they do not already have in stock for the next two weeks until auctions restart on April 14th.  The vast majority of hold wools and grower stocks are now exhausted and fresh wools coming into broker stores are not huge.  AWTA figures released for the month of March show that season-to-date testing and therefore indicative production is still 10% below last year, and more or less 20% below the 5-year average.  

Speculation on the showfloor is that both Sydney and Melbourne will be reduced to one-day sales at some point in May as quantities dry up further.  South African supplies are limited as always at this time of year and they will certainly not be able to alleviate the shortfall in Australia.  South American producers are still a few months away from shearing the next clip given their harsh winter conditions in Patagonia especially.  Growers in Uruguay have been steadily selling their hold wools until the correction in Australia brought things to a halt.  It is expected that the last few remaining clips on farm will be quickly sold now that the market has resumed its upwards trajectory.  The northern hemisphere shearing season is normally starting to crank up in May and June but it will take a couple of months for this greasy wool to reach the processing facilities in China – perhaps a little longer this year from Europe with the indirect shipping routes now being used.  So the early stage processing fraternity in China is beginning to sweat a little and they are pouring over their spreadsheets and allocating production slots as far out as they can to ensure they have enough greasy wool to see them through the season.

At the same time as the squeeze on supply is becoming more critical, the demand for tops, yarn and fabric in the Chinese domestic market has ticked up this week after processors had struggled to sell much of anything while the market was correcting.  Now that the correction has run its course the fence sitters are all clambering down again and trying to get some of last week’s prices.  Demand is not booming in China and there have been many tough conversations with retailers and brand wholesalers about the increased prices this year.  Many of the purchasing managers have little exposure or knowledge for the greasy wool market and struggle to understand why a market in Australia should have so much impact on the price of the goods they are trying to put on the shelf, especially when consumers in China are more than a little reticent to part with their cash and retailers would dearly love to offer something cheaper than last year as an inducement.  The better connected brands and those with more skin in the game are much more knowledgeable than your average department store purchasing manager but they still face the same cost pressures at a consumer level.  

There is a lot of thought being given to noble fibre blends this season as the garments then lend themselves to a different price point but the merino must then also be of the highest quality to enhance rather than detract from the fibre amalgamation which is adding to the price pressure at the quality end of the clip.  Blends of merino and silk, or merino and cashmere and alpaca have been common for the past few seasons but are gaining in significance this year as brands try to find that elusive trigger point to switch on the customer.  Wool/cotton blends have gone to a whole new level lately as marketing the natural fibre blend is considered more appropriate and 20 or 30% of merino definitely enhances the feel and performance of a cotton garment.  The Lamao or fur-like garments in China this year have been the biggest single mover with everyone jumping on board.  Soft and fluffy yes but exhibiting the best qualities of merino in terms of drape and function perhaps not.  But fashion is a fickle beast and anything which creates demand for merino is welcome despite how shaggy the wearer may look.

So, after the correction we are now ‘back on track’ and although there is still some pain when mills try to sell fabric and garments at this price level not many believe that the wool market will fall.  As things settle down in the Middle East and the global economy rebuilds the next couple of months in wool world should be fairly exciting.