Australian wool prices lifted sharply this week amid accelerating demand from China.
The industry’s benchmark Eastern Market Indicator (EMI) climbed 109 cents a kilogram to 1,453 cents – its highest point since June 2022.
The EMI has now risen 10 weeks in a row, the longest run of price rises as 1987.
Speaking to ABC landline after a trip to the Nanjing Wool Conference in China, Endeavour Wool Exports trading manager josh Lamb said the Chinese government was looking to replace uniforms, which was creating demand, and there was new appetite for wool-based activewear.
“So when you get a rise in demand from China and lay that over a historically low wool clip [in Australia] than you get the type of market we’ve seen in the last few months,” he said.
“Most customers in China have been quite positive over the last week, even though were a bit taken-back by how quickly [the price] has risen in such a short space of time.
“But that pent-up demand has shown itself in one hit and that’s why we’ve seen such severe rises.”
The EMI had a rare jump of more than 100 cents this week. (ABC Landline)
Mr Lamb said China was Australia’s largest customer for wool, buying about 85 per cent of production.
He said China was investing heavily in the sector and in it “for the long haul”, but was well aware that Australia’s wool production had fallen to its lowest level in more than 100 years.
‘Nothing short of what wool growers deserve’
The head of domestic operations with Australian wool Innovation, Scott Carmody, said the price rises were a relief for farmers who had persevered through low prices, high input costs and drought conditions.
“What’s happened in the last 10 to 12 weeks has been a reward for growers who have shown faith,” he said.
“I think it will give a boost in confidence that they are doing the right thing and I truly believe this is the evidence people need to stay in wool.”
Mr Carmody said he believed marketing campaigns promoting wool’s clean, green credentials were cutting through.
“People are considering the fibre when they go shopping now, and wool is not a microplastic, planet-polluting synthetic and we think that story is breaking through,”
he said.
Wool Prices Surge, Catching Industry Off Guard
Australian wool prices have experienced a significant and unexpected rise, driven by short supply and renewed confidence in global markets following the softening of US trade tariffs.Industry experts say the increase has taken many by surprise, despite clear signals of tightening supply.
Eamon Timms, a wool market analyst, noted the strong message regarding limited supply has resonated throughout the industry.”The message has clearly got through that supply is short … but I think the extent of the rise has taken everyone by surprise,” he said.
The easing of US trade tariffs has played a key role in bolstering market confidence. Peter Morris,owner of WA wool exporting company PJ Morris,explained that uncertainty surrounding the tariffs had previously led to cautious purchasing. “clients have been very cautious on purchasing wool, as they haven’t really known what the impact of those tariffs would be,” he said. “I think it’s settled down now and people have a little bit more confidence, so it’s created a situation where people have to restock and put wool back into the pipeline.” https://www.pjmorriswool.com.au/
While acknowledging the market is likely to correct at some point, Morris remains optimistic about the long-term outlook for wool.
This price surge follows a period of volatility in the wool market.According to Australian Wool Innovation (AWI), the Eastern Market Indicator (EMI), a key benchmark for Australian wool prices, has seen ample gains in recent weeks.https://www.wool.com.au/market-intelligence/wool-market-reports/ AWI provides regular updates on market conditions and forecasts.
Additional reporting by Warwick Long and Belinda Varischetti.
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