Wool Market Update (September 2024)

The AWEX EMI price is currently 1,091c/kg clean, a reduction of 36c/kg or 3.2% year on year. As the Profarmer graphs below illustrate, all micron grades except 28 micron wool have decreased in price over the last year. Thankfully though, this decrease over the last twelve months, has been considerably less than it was for the previous twelve months, especially for fine to medium micron clips. Fine wools have fallen further than the broader merino categories, but <18 micron wool is still performing relatively well. This is illustrated by the fact that the 18 micron indicator has fallen only 67c/kg clean or 4.6% over the last year, compared with a drop of 440c/kg clean or 28.8% over the previous year.

The modest rise of 4c/kg clean in the AWEX Eastern Market Indicator last week, has been attributed to currency movements, mainly the AUD versus the USD and CNY, which allowed stronger buyer interest from local and Chinese operators. The market was supported also by easing supply of wool reflected by lower offerings. The quantity of wool offered for sale for this selling season to date, is 21.1% less than it was for the same period a year ago.

Assuming a yield of 65%, the current price should result in net average returns for 18 micron wool, of around $9.50/kg greasy. This would produce a return of $57.00/head net for sheep cutting 6.0 kg/head greasy.

This price of $9.50/kg net compares with the average budgeted Break Even Price for clients in 2024 of $6.26/kg, still providing a significant profit margin for low cost producers.

The following graph shows the AWEX Eastern Market Indicator (EMI) in cents per kilogram clean, from 2014 to date.