Crossbred prices have, in the past year, recovered a lot of the price lost in 2019-2023 in both Australian and US dollar terms. On top of these price rises, premiums for RWS accredited wool have also rebounded, which is what this article looks at.
As crossbred wool prices plunged to depressed price levels in the 2021-2024 period, RWS premiums also feel for both crossbred and merino wool. Figure 1 shows the annual average RWS premium for full length 28-micron crossbred fleece sold at Australian auctions from 2020-21 to the current season. The schematic shows the premium in cents per kg (bars) and percentage terms (line).
The early premium of 90-100 cents per clean kg represented at substantial premium of 27%. RWS premiums began to fall in 2022-23, reaching low levels in 2023-24 below 20 cents per kg. Exporters did report at the time that non-auction transactions were taking place with higher RWS premiums. In 2024-25 the premiums rebounded and have continued to firm this season, averaging around 150 cents or 20%.
Figure 2 shows what the RWS premium looks like in the current market across a range of crossbred micron categories. It shows the March (to last week) average price for full length crossbred fleece with RWS accreditation and without RWS accreditation (lines) plus the difference between the two, the RWS premium, in bars. The premium is generally somewhere between 100 and 200 cents, across the whole micron range (24 to 35 micron). This means, in percentage terms, the premium is ranging from around 10% on the fine edge of the crossbred micron distribution, to around 40% on the broad edge.
With the rebound in both base fleece price and RWS premiums from mid-2024, supplied has responded this season by rising substantially. Figure 3 shows the season annual volumes for total crossbred RWS accredited wool sold at auction in clean terms. In 2019-20 and 2020-21 auction volumes were insignificant. Recall that RWS premiums burst onto the Australian market in late 2021, at the time Cape Wools (Link available here) started to publish weekly merino premiums from the South African auction market, so crossbred producers had not yet had any incentive through premiums to supply RWS accredited wool to the market.
The volume sold at auction fell from a peak in 2022-23 (where it reached 4.3% of sales) to 3.6% in 2024-25. This season volumes have jumped to around 2,500 clean tonnes to date representing 11% of sales, and the premiums have picked up slightly on the higher volume which is a good sign.
Australia is not the only supplier of RWS accredited crossbred wool, which any visitor to a South American wool store will attest to. The wool producing countries in South America are also adopting RWS accreditation in response to the increased premiums.
What does it mean?
The best part of the recent increases in both supply and RWS premiums for crossbred wool is the rising premium on higher volumes. RWS premiums have varied widely during the past six seasons, which is always a risk for users of RWS wool. Production responses lag price signals in the wool market due to the long production cycle, compared to cotton for example which can vary northern and southern hemisphere planting every six months. For RWS good premiums begat more supply. The reverse also holds.
Key Points
- RWS premiums for crossbred wool have rebounded from very low levels reached in 2023-24.
- The premiums are fairly even in cents per kg terms across the crossbred micron range – between 100 and 200 cents clean.
- The supply or RWS accredited crossbred wool at Australian auctions has responded by increasing from 3.6% of sales last season to 11% this season.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: AWEX, ICS, Mecardo
