Prices at this week’s Australian wool sales surged to levels not seen since early March of 2023. All types and descriptions in the merino fleece room sold 35 to 50ac/clean kg dearer and even more in WA as that region had to catch up to the Eastern centre prices that had moved dearer the previous Wednesday as Fremantle didn’t have a sale.

In the Western Australian market at Fremantle pressure around the 19.5 to 20.5micron area of the offering saw prices accelerate to being 50ac dearer than the previous week’s close almost immediately upon the start of selling. The price movements were so great that these qualities finished the week remaining above the Eastern centres.

The largest price gains of the week came from the Sydney Merino fleece of 17micron. This indicator shot up 69ac/clean kg or towards 4% dearer. The overall market when measured by the Eastern Market Indicator (EMI is made up of a basket of 124 individual types of all breeds) moved 2.2% higher for the week.

Basics of any spot commodity trading environment suggests markets mostly go up when demand outstrips supply. Demand or inventory requirements ex China since COVID have revolved around the 270mkgs to 280mkg. This was indicative of a period of stable demand under a subdued pricing period.

Now that production is forecast to be a few percent under that 5-year average and demand remains unchanged then this is a demand driven market that is being amplified by supply pressure. To say that it is just supply forcing the better levels is too simplistic.

Additionally, are we are seeing the green shoots of new demand as the economic ,consumer conditions start to slightly improve. Also, is the natural fibre story starting to bite a bit deeper and value starting to be placed on that narrative?

Auction volumes rise by about 7% next week with a touch over 29,000 bales being rostered to sell. Auction sales remain to the same schedule and will be on Tuesday and Wednesday, with Fremantle selling just on Tuesday.