The 2024-25 season was one of continued weakness in apparel fibre prices and drought in south eastern sheep regions. This article takes a look at the recently completed season.
AWTA (see more here) volumes in 2024-25 were 11.8% lower in total farm bales tested in Australia. In 2025-26, the AWTA are changing state-based volumes from where wool is tested to using the more accurate wool statistical area so the state volumes reflect production. In adjusted clean terms, the merino component of the AWTA volumes was down 12% for the season compared to the previous season, and the non-merino component was down 14%.
Figure 1 shows a time series of the merino and non-merino components of AWTA (farm bales) from the mid-1990s to 2024-25. In 2024-25 merino volumes fell to 2019-2020 levels, which were depressed by the advent of the pandemic. Non-merino volumes, while lower, are still above 2019-2021 levels.
It usually pays to consider changes in supply and price together, one factor providing context for the other. In the wool market, changes in volume are reflected in changes in relative prices, premiums and discounts or price ratios. Changes in supply are not usually uniform across the different micron categories, as the fibre diameter distributions move finer and broader in response to changes in breeding and seasonal conditions. With this in mind, Figure 2 shows the year on year change in Australian AWTA volumes (line) by micron category as well as the change in auction price (bars).
Average prices in 2024-25 increased for 13 micron and finer, and 19 micron and broader wool. In contrast, prices fell for 14 to 18 micron. Supply increased for 16 micron and finer wool, falling for 17 micron and broader merino and crossbred categories. Lower supply for broader merino looks to have helped push prices up slightly, while the increased supply of finer merino wool pushed prices lower, with the key exception of the very fine micron categories (12 and 13 micron). For the crossbred categories, lower supply looks to have helped push prices higher.
On the supply side wool production is facing serious challenges from increased costs and low prices in relation to competing enterprises, specifically prime lamb. Seasonal conditions have also been a major constraint during 2024-25. Figure 3 shows the 12 month rainfall rank for states (weighted across sheep regions within each state) with the bubble size showing the proportion of wool sales from each state during the season. The rainfall rank is calculated using data from the past 40 years. As a rule it is the change in seasonal conditions which correlates to change in production (sheep numbers, fibre diameter, clean fleece weights). However Figure 3 shows the rainfall rank as both Victoria and South Australia had very low ranks (in the first decile), a combined region accounting for 38% of wool sales.
The many types of wool are used mainly in apparel and wool prices have a strong correlation to the major apparel fibre prices. Table 1 shows the season on season change in price for a range of wool and other apparel fibre price series. It shows that wool prices performed better than the non-wool fibres, helped by the lower supply shown in Figure 2. Prices for crossbred and downs were the star turns (off low bases), rising by 15% and 21%. The average merino price was up a marginal 1.5%. In contrast the non-wool staple fibre (NWSF) prices series, which is a weighted average price of cotton, polyester, acrylic and viscose, fell by 7.5%. Cotton fell by 13% and even cashmere was down by 1%. The weak performance of non-wool apparel fibres illustrates the poor demand present for apparel fibres generally.
What does it mean?
Lower supply helped to push some wool category prices higher, but the weaker non-wool apparel fibre markets show the tide was against wool prices lifting by substantial amounts. Seasonal conditions in Victoria and South Australia (and parts of southern NSW) have been extremely dry which has put downward pressure on sheep numbers and wool production, in addition to costs and competition from other livestock enterprises. Median spring rainfall in these regions would be enough to see a strong rebound in sheep numbers, but we will have to wait until 2026 to see the size and makeup of such a drought recovery.
Key Points
- Wool production in Australia fell for both merino (12%) and non-merino (14%) in 2024-25
- Seasonal conditions in South Australia and Victoria were extremely dry
- Only 16 micron and finer wool had increased production, supply fell for all other micron categories
- Non-merino prices lifted by 15-20%, on lower production, in contrast to non-wool staple fibre prices where the weighted average price fell by 7.5%
Click on figure to expand
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: AWEX, RBA, AWTA, Emerging Markets, Fibre Year, Long Paddock, WTiN, ICS
