The Australian wool market returned strongly this week following the Easter recess, recording gains of 38 cents in the EMI and 35 cents in the WMI. Despite a stronger Australian dollar, USD returns also improved, rising by 68 cents to 1,302 and 77 cents to 1,463 respectively. This has pushed the EMI to its highest level since June 2019, while USD returns are now at their highest since July 2019. The strength in USD terms highlights the underlying demand strength in the market, with buyers willing to absorb currency headwinds, particularly at elevated price levels.

Finer types led the market this week, with average gains of 50–55 cents across the sales. Medium Merino wools showed similar strength, rising by 45 to 50 cents. Crossbred wools recorded more modest increases of 10–15 cents, while Merino cardings finished 15 to 20 cents dearer. The more subdued gains in crossbred types continue to highlight a divergence in demand, with stronger competition focused on finer Merino wools.

Pricing across all selling centres continued to highlight strong buyer preference for quality, with premiums for better style types remaining well supported. Discounts for higher vegetable matter, lower strength and shorter length wools remained significant, indicating an ongoing processor focus on performance and yield. This reinforces the current market structure, where demand is concentrated in higher specification Merino types, while broader and lower quality wools continue to trade at a relative discount.

This week also saw a larger offering pass through the sale rooms, with wool accumulated over the recess increasing the national offering to 44,765 bales, up by approximately 8,500 bales. This short-term increase in supply did little to dampen competition, with strong buyer activity reflected in the low passed-in rate and solid clearance levels. This indicates that buyers were actively seeking volume rather than showing resistance at higher price levels. Next week’s offering is expected to fall by ~ 12,000 bales, a significant reduction that should look to provide continued support to current price levels.

Next week sees Melbourne and Fremantle sell on Tuesday-Wednesday while Sydney selling on Wednesday only.