AUSTRALIA’S wool market continued to strengthen this week, with the benchmark indicator rising 30 cents over two days of auction selling this week, to hit its highest level in seven years.

The AWEX Eastern Market Indicator lifted another 15c to finish the week at 1979c/kg, its highest level since October 2018, the Australian Wool Exchange said.

The EMI is now just 22c away from the milestone 2000c barrier and 138c from its all-time high of 2116c.

Fremantle returned to the roster, pushing the national total up to 25,662 bales, although this was the smallest three-centre offering since 2020.

On the opening day, AWEX said the market opened strongly and by the end of the day the movements in the Merino fleece Micron Price Guides (MPGs) ranged from unchanged and +65c/kg.

The largest gains were in the western region, as Fremantle did not enjoy the price rises seen during the previous week’s auctions.

The news in US dollar terms was not as favourable, due to currency movements the EMI fell by US22c/kg, closing the day at US1385c/kg.

On the second day, just the eastern centres were selling and this time the MPG movements ranged from -25c/kg to +37c/kg, AWEX said. Strength in the crossbred sector helping the EMI to add another 6 cents.

AWEX said the EMI closed the day and the week at 1979c, its highest point since October 2018.

This week’s passed-in rate was again low, just 3.3pc failed to reach seller reserve, showing seller willingness to accept the prices on offer.

AWEX said with clearance rates consistently high, the amount of wool on hold continues to diminish. This is a contributing factor to the smaller sales being seen, as there is not a lot of wool on hold coming onto the market.

Buyer confidence driven by market fundamentals – AWI

Australian Wool Innovation said after a scheduled non-sale week, the Western Market Indicator returned to the market and posted a strong 45-cent rise to finish at 2170 c/kg clean.

“Currency movements also provided support, with the Australian dollar weakening by US1.65 cents over the selling week, improving purchasing power for offshore buyers.

“However, the lower exchange rate saw benchmark indicators decline in US dollar terms, with the EMI falling US22 cents to US1385 c/kg and the WMI easing US4 cents to US1519 c/kg.

“The EMI now sits at its highest point since October 2018 and just 21 cents below the 2000 c/kg threshold, a level that has become increasingly achievable as gains broaden beyond the fine Merino sector,” AWI said.

“Strength in medium Merinos, crossbreds and cardings suggests buyer confidence is being driven by wider market fundamentals rather than isolated demand for a single wool type.

“This week’s offering was the smallest three-centre roster since 2020, highlighting the tightening supply conditions currently supporting the market,” AWI said.

“With Fremantle absent from next week’s selling program, national volumes will fall further, keeping supply pressure firmly in buyers’ focus.

“Combined with another week of low passed-in rates and limited wool available outside the auction system, the supply backdrop remains supportive and should help sustain competition for well-specified lots in the short term.”

Next week Fremantle is having a non-sale week and with just Sydney and Melbourne in operation. The national quantity is expected to be just 21,720 bales. This will be the smallest sale since Week 51 of the previous season.

Sources – AWEX, AWI.