The 2022/23 Australian wool season for the most part stood resilient in the face of the uncertainty and supply-driven pressures that have impacted the price fortunes of other agricultural commodities. On the auction floor this year, buyers were met with significant supply and a lower proportion of low VM wool. Conversely, sellers were wading against the tide of economic hardship and unfavourable fundamentals. What eventuated was a brave showing by the market overall which found itself running on fumes at the end with steep price declines to finish the season.
The Eastern Market Indicator (EMI) fell a further 13ȼ to finish the season at 1126ȼ/kg. The EMI tracked sideways for much of the 2022/23 season, however, fundamentals took a toll with significant supply and stagnant demand wiping 281ȼ or 21% off the EMI over the season. Australian wool in the context of the global wool trade is significantly more affordable overall to importers than at the beginning of the sale, as the EMI expressed in US$ reached 748ȼ/kg, (a 22% decline).
The majority of MPG categories declined again this week in all centres, and all MPGs are down from the beginning of the season. Fine wool premiums also eroded by the end of this season, with the price declines for finer categories far outpacing the broader end of the spectrum.
In Melbourne, 16.5 MPG has dropped 966ȼ this season to finish at 1985 ȼ/kg. 17MPG fell 861ȼ (to 1842 ȼ/kg) meanwhile 20MPG declined 154 ȼ to 1333ȼ/kg. It was a similar story this season further North to Sydney as 16.5MPG fell 942 ȼ to 1968 ȼ/kg, 17MPG dropped 869 ȼ to 1793 ȼ/kg and 20MPG fell 10 ȼ to 1316 ȼ/kg.
The West was back selling again this week and prices continued to ease. The Western Market Indicator (WMI) finished the week down 43 ȼ to 1271 ȼ/kg, a 14% decline from the beginning of the year.
Cardings in Sydney fell 171ȼ over the season to 748ȼ; Melbourne cardings dropped 193ȼ to 708ȼ and in Fremantle, cardings were 245ȼ worse off this season finishing at 686ȼ. In a year to forget for crossbred wool, 28MPG in Sydney was 92ȼ worse off at 298ȼ/kg and down 94ȼ in Melbourne ending at 318ȼ.
43 344 bales in the end were offered to market this week and 37,416 bales were sold. The market’s ability to absorb this volume should be a welcome sign to sellers, as pass-in rates this week sat at 13.7 % nationally, a touch above the season average of 13.2%. 1,876,526 bales were offered to auction this season with 1 629 053 selling, this averages out to 36,076 bales sold per week. As shown in Figure 4, this weekly average has bounced back in recent times from the figures seen over the last few years. Drought, pandemics, and global economic stagnation placed significant external pressure on the wool market in recent years, but we can see that the volume of wool moving through the system is bouncing back.
Next week
An administrative change as we leave the 2022/23 season and enter 2023/24, unfortunately, won’t signal a change in the macroeconomic factors impacting wool demand. Sluggish economic growth, significant global stocks in other natural fibres, inflationary pressure on end-use consumers shifting away from luxury goods and a question mark over the return of Chinese economic growth are just some of the demand drivers to account for as we look ahead to spring.
When wool buyers walked into selling centres to start the week, Australian wool was more expensive for exporters before bidding began. This set the tone
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In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
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How did this year end up for Wool?
The Eastern Market Indicator (EMI) fell a further 13ȼ to finish the season at 1126ȼ/kg. The EMI tracked sideways for much of the 2022/23 season, however, fundamentals took a toll with significant supply and stagnant demand wiping 281ȼ or 21% off the EMI over the season. Australian wool in the context of the global wool trade is significantly more affordable overall to importers than at the beginning of the sale, as the EMI expressed in US$ reached 748ȼ/kg, (a 22% decline).
The majority of MPG categories declined again this week in all centres, and all MPGs are down from the beginning of the season. Fine wool premiums also eroded by the end of this season, with the price declines for finer categories far outpacing the broader end of the spectrum.
In Melbourne, 16.5 MPG has dropped 966ȼ this season to finish at 1985 ȼ/kg. 17MPG fell 861ȼ (to 1842 ȼ/kg) meanwhile 20MPG declined 154 ȼ to 1333ȼ/kg. It was a similar story this season further North to Sydney as 16.5MPG fell 942 ȼ to 1968 ȼ/kg, 17MPG dropped 869 ȼ to 1793 ȼ/kg and 20MPG fell 10 ȼ to 1316 ȼ/kg.
The West was back selling again this week and prices continued to ease. The Western Market Indicator (WMI) finished the week down 43 ȼ to 1271 ȼ/kg, a 14% decline from the beginning of the year.
Cardings in Sydney fell 171ȼ over the season to 748ȼ; Melbourne cardings dropped 193ȼ to 708ȼ and in Fremantle, cardings were 245ȼ worse off this season finishing at 686ȼ. In a year to forget for crossbred wool, 28MPG in Sydney was 92ȼ worse off at 298ȼ/kg and down 94ȼ in Melbourne ending at 318ȼ.
43 344 bales in the end were offered to market this week and 37,416 bales were sold. The market’s ability to absorb this volume should be a welcome sign to sellers, as pass-in rates this week sat at 13.7 % nationally, a touch above the season average of 13.2%. 1,876,526 bales were offered to auction this season with 1 629 053 selling, this averages out to 36,076 bales sold per week. As shown in Figure 4, this weekly average has bounced back in recent times from the figures seen over the last few years. Drought, pandemics, and global economic stagnation placed significant external pressure on the wool market in recent years, but we can see that the volume of wool moving through the system is bouncing back.
Next week
An administrative change as we leave the 2022/23 season and enter 2023/24, unfortunately, won’t signal a change in the macroeconomic factors impacting wool demand. Sluggish economic growth, significant global stocks in other natural fibres, inflationary pressure on end-use consumers shifting away from luxury goods and a question mark over the return of Chinese economic growth are just some of the demand drivers to account for as we look ahead to spring.
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Data sources: AWEX, AWI, Mecardo
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
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In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
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We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.