Wool market is ‘yet to see full impact of season’

The wool industry is “yet to see the full impact” of flock decreases due to dry conditions and ongoing low prices, brokers say.

Wool volumes are expected to drop further after the Easter break.

And it might help support the volatile market, which dropped 30c/kg last week due to currency movements.

But industry is “yet to see the full impact” of flock decreases due to dry conditions and ongoing low prices, brokers say.

The benchmark Eastern Market Indicator dropped 30c/kg to 1232c/kg last week, which is 74c/kg higher than it was at the same time last year, but 90c/kg higher than the 10-year average.

The value of the Australian dollar, the United States tariffs, drought and lack of retail competition continue to impact the wool market.

Fox and Lillie brokerage manager Eamon Timms said the US’s additional tariffs applied on China created uncertainty in the Australian wool market, but he believed there would be no immediate downside risk.

Wool volumes are expected to drop further after the Easter break. Picture: Andy Rogers

Mr Timms said they would expect lower wool volumes after Easter, coinciding with wool production and current seasonal conditions.

He said the volume of wool had dropped significantly compared to 2024 quantities.

“People need to keep reducing their flock size and save on feed, people are trying to reduce the drag on their financial resources so certainly the selling of stock has been quite a significant factor this year,” Mr Timms said.

“We’re yet to see the full impact of that season.”

Mr Timms said there had been more low yielding wool on offer in the past month due to dirt and dust from dry areas.

While there would be fewer bales on offer post-Easter, which was a normal part of the production cycle, Mr Timms said the drier season and more stock being sold meant the volume drop-off would likely be exacerbated.

Australian Wool Innovation chief executive John Roberts said while the EMI has done nothing but go up since Christmas, it’s been rocky.

“Wool growers have had enough. A lot of them are getting out, selling their sheep … because it’s just not paying the bills,” Mr Roberts said.

He said dry conditions meant some producers had destocked flock numbers, but confidence had been a main factor to the wool market’s condition.

Mr Roberts said demand had outstripped supply as brands searched for sustainable fibres, while US tariff announcements and changes had affected price increases.

“Pre-Covid when the EMI was $18/kg, no one was complaining, people were able to absorb that and pass it up the supply chain.”

Wool sales resume next week with 40,000 bales on offer.