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Wool Market Update (September 2018)

The following graph shows the AWEX Eastern Market indicator (EMI) in cents per kilogram clean, from August 2009 to date.

Decreased wool availability plus strong demand from buyers has continued to push wool prices beyond record levels. As shown in the graph, while there have been short term fluctuations in price, there has been a strong upward trend since 2015. At current wool prices, wool has become very profitable for many producers, allowing reinvestment into infrastructure such as woolsheds and yards.

Currently the AWEX EMI is at 2,067 c/kg clean.  This should result in net average returns to many clients with Merino clips, of around $13.40/kg greasy, resulting in returns of $80/head net for sheep cutting 6.0 kg/head greasy.

This price of $13.40/kg net compares with the average budgeted Break Even Price for clients in 2018 of $6.55/kg and that for the top 20% of $4.87/kg, providing a significant profit margin, even allowing for the cost of drought feeding.