October wool market update

Highlights for wool

• The Australian wool market continued its auspicious start to the season, increasing for 11 consecutive selling weeks, lifting the AWEX EMI to 1,565 c/kg. This is 348 cents higher than the start of the season and 461 cents higher than the same time last season. The increases have been shared across the microns; however, merino fleeces have been particularly well supported with increases of up to 221 c/kg seen week-on-week for some merino fleece types. The EMI in USc terms has also risen 248 USc over the same period to sit at 1,032 USc/kg. This increase has been despite the Australian dollar strengthening at varying times over this period, speaking to an underlying level of support within the market.
• As had been forecast, supply has decreased this season. As prices have improved the current weekly offerings are sitting at similar levels to last season as producers take advantage and bring stored wool to market. This parity is providing a sense of optimism for sellers that the recent price increases are an example of a true increase in demand as opposed to purely being driven by lower supply. There were reports from the recent Nanjing Wool Market conference held in China that indicated there were low levels of stock at mills currently, helping to build demand. However, it was also noted that as prices increase blends will find favour in keeping price points in check. Following the strong start to the season overall market sentiment has lifted to a belief that the lift in demand is genuine and sustainable.

Source: Australian Wool Exchange (AWEX)

Claire Adams

Agricultural Analyst

Claire is our Insights specialist for the wool industry. She combines her experience through government, industry and agriculture alongside a Masters in Global Food & Agricultural Business and a Bachelor of Environmental Science (Hons).