Australian wool market ends 65 cents higher on last financial year but lower Chinese demand fuels concern

Australia’s 2024-25 wool selling season has come to an end, with industry feeling a weight lifted after both the eastern and western market indicators improved slightly during the past 12 months. But supply remains the main issue for the $2.7 billion industry, with the 1.42m bales sold during the selling season the smallest volume of wool sold in a season in more than 100 years. Wool industry figureheads told Countryman the 5.7 per cent increase in the Eastern Market Indicator, year-on-year, was good news for the sector but “did not reflect the state of the industry”. A season marked by volatility and tight supply was reflected in the number of bales on offer in 2024-25, which reduced 14.3 per cent year-on-year, from 1.82 to 1.56 million bales offered. The total market value of wool put through the auction system also dropped 13.3 per cent, from $2.2 million to $1.94 million. An unusually flat finish to the selling season saw the EMI gain 65¢ to close the season at 1207¢/kg on June 25. The EMI remained unchanged in both US and Australian dollar terms — registering zero movement, a rare occurrence in the market. The Western Market Indicator closed at 1354¢/kg, up 73¢/kg week-on-week. Australian Wool Exchange senior market analyst Lionell Plunkett said broad wools had been the season’s strongest performer in terms of percentage, rising by 71¢ — or 18.1 per cent — based on the analysis of individual micron price guides in the south, at Melbourne. “The best of the Merinos was the 21 micron price guide which added 108¢, an increase of 8.3 per cent,” he said. Westcoast Wool and Livestock regional wool manager Brad Faithful the biggest current challenge facing the industry was reduced demand from the world’s biggest wool market, China, which buys more than 90 per cent of the Australian clip. “Smaller mills are actually downsizing their production and the bigger mills are maintaining what they have — there has been reduced competition in that space of processing in China,” he said. “Until we start to see some good direction and recovery from the Chinese economy — whilst prices will increase as we go this season purely on the back of lower quantities — the real thrust for new demand is still quite limited.” Mr Faithfull said farmers and the wool industry were not expecting significant price gains in the short-term. Despite this, he felt the “tremendous rains” in the south of WA in recent months would result in an improvement in wool quality, which could trigger an increase in interest from the European market. “If we start to get some really good wool types coming in it’ll attract a bit more activity from Europe and also it’ll stimulate a bit more activity out of the Chinese market — the qualities will go in our favour,” he said. Southern Aurora Markets partner Mark Avery said the 2024-25 season had started with promise, but failed to deliver, with most Merino types gaining up to 150¢ in the first quarter. “Unfortunately, this failed to spark any significant interest in the forward market and opportunities were left on the table for sellers and buyers,” he said. “The second quarter has seen much of the Merino market slip upwards of 100¢. or two thirds, from those peaks.” About 30,000 bales were expected to be offered during the first sale of the 2025-26 season on July 1. Wool auctions are typically rostered on 46 weeks of the year, with sale recess weeks held during Christmas, Easter and July.