Eleven weeks of gains as wool market records strongest streak since 1987

Confidence surged again through the Australian wool market last week, with short supply and fierce demand driving prices to new heights. The rally has now stretched into its 11th consecutive week, the longest winning run since 1987, pushing the market to levels not seen in years and signalling a strong resurgence in global demand for quality Australian fibre.

The AWEX Eastern Market Indicator (EMI) climbed a further 112 cents across the two selling days to finish at 1565 cents clean, extending last week’s 109-cent surge. According to the Elders wool market report, last week’s increase was the fifth-largest since AWEX began reporting, with the EMI now up 358 cents since early July, a 30% rise in just over three months and the largest unbroken rally since 1979.

The Australian Wool Innovation (AWI) market commentary described the result as “staggering”, noting that “all Merino types and descriptions accelerated to levels of 120 to 200ac dearer for the week. Crossbred wools were 60 to 70ac dearer whilst carding wools underperformed comparatively by being just 5 to 10ac/clean kg.”

The Elders wool market team said records “continued to tumble” as fierce competition among exporters and traders drove prices higher. Buyer exporters reported new sales being written at or near market levels before auctions even began, clear evidence that demand is outstripping supply.

"The two major trading houses dominated purchasing, securing over 40% of Merino fleece between them as they moved to lock in volumes for clients," according the most recent Elders Wool Market update. 

Elders District Wool Manager for southern NSW, Toby Haylock, said supply is the defining factor behind the rally, with the latest figures highlighting a clear production decline. 

Latest information from the Australian Wool Testing Authority (AWTA) reveals data for September shows total lots, bales and weight tested are down 9.9%, 12.9% and 13% respectively compared to the same month last year. 

“It’s pretty clear production is back, and the only thing keeping offerings steady is wool coming out of hold, with stronger prices encouraging growers to sell,” Mr Haylock said.

"I don’t think we’ll get back to the highs of 2018, but it’ll get to a spot where growers are comfortable, and will be able to make more profit. The biggest issue has been the cost of inputs - margins have been tight,” Mr Haylock said. 

Meanwhile, the AuctionsPlus Wool Offerboard continues to provide another valuable selling avenue for agents and growers. More than 300 bales are currently listed, with 43 broking and 48 buying companies registered to trade nationally. Since 2013, more than 220,000 bales have been sold through the online platform.