With the last wool auction sales being held this week in Australia, and South Africa auctions already in recess, it is timely to look at how the greasy wool market finished 2025 compared to a year ago.
For merino wool, there was little movement in price for the first half of 2025, with an abrupt rise in value during the September quarter. Figure 1 shows the merino average fibre diameter (18-18.5 micron) MPG price from 2015 to last week, as well as the eastern AWEX 28 MPG, all in nominal Australian dollar terms. The 400-cent rise in the merino price in the September quarter stands out after a few lacklustre years.
The crossbred price (in this case, the 28 MPG) had been slowly rising since reaching an extraordinary low point in 2023. This upward trend accelerated strongly in the September quarter, with the 28 MPG up by 300 cents.
The price rises seen in the greasy wool market in the September quarter were in stark contrast to the continued sluggish performance of the other major apparel fibres (read more here).
Figure 2 shows the average price by half micron for all merino wool sold in December 2024 and December 2025 between 14.5 and 22.5 micron, along with the change in price level in percentage terms. For 17 micron and broader categories, prices are roughly 30-35% higher than year-ago levels. Prices for 16 micron and finer have not risen by as much (if at all) as they have been trading at much better levels by historical standards.
Figure 3 shows the all in average price by half micron for non-merino wool from 20 through 39 micron for December 20024 and December 2025 (to last week) and the change in price in percentage terms (grey columns). The best performing non-merino micron categories were 26 through 31 micron, with 28 micron prices lifting by nearly 70%, year on year.
Much focus is centred on demand for wool prices, which tends to drive the cycles and trends. Supply, which effects relative prices between wool categories (and fibres), is an important driver of the market structure. Figure 4 shows the change in AWTA core test volumes between the 2024 and 2025 calendar years. 2025 volumes are estimated by using data up to November and adjusted up to a full 12-month volume. AWTA volumes include wool sold outside of the auction system. Figure 4 shows that only the 15 micron and finer categories have enjoyed increased production, with 16 micron and broader volumes all falling. The 21 micron category and the 32 micron and broader categories suffered the biggest drop, both around 30%.
A major driver of production is rainfall. Figure 5 shows a weighted average (for wool production regions) rainfall rank by state to November 2025, with the bubble size reflecting the proportion of the Australian wool clip contributed by each state, with the Riverina split out of NSW. Queensland had the best rainfall, with a ranking of 74% (the ranking compares rainfall for the previous 12 months to the past 40 years), but only contributes 2.7% of the national wool clip. Victoria and South Australia had low rainfall ranks (around 24%), impacting 37.5% of the national clip. The NSW numbers combine a dry south and a wetter northern section, with the average rank around 44%, hence splitting NSW into the Riverina and NSW excluding the Riverina. If we add the Riverina to Victoria and South Australia, it means half of the national clip was struggling with low rainfall in the past year. This translates into lower sheep numbers, lower clean fleece weights and lower micron wool.
What does it mean?
Varying levels of wool supply are correlated with varying relative prices within the wool market. Over time, the lower supply of broader merino wool has also been correlated to a rising price ratio to the major non-wool staple fibres. This price ratio seems to have taken a big lift in the September quarter, or more accurately, returned to trend after being low. Dry conditions persist for half of the national wool clip, and will do so until new season rainfall arrives in 2026. Until then, supply will remain under downward pressure, helping support price at the new end of 2025 at higher levels.
Key Points
- Both merino and crossbred prices rose markedly during the September quarter.
- While such price volatility is not unknown in the wool market, it seems low supply was the primary driver, which is unusual.
- Low rainfall for half of the national wool clip has been a major driver of lower volumes.
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Data sources: AWTA, AWEX, BOM, ICS, Mecardo
