Premiums for quality assured wool, non-mulesed wool, are the bright light in the wool market at present, with feedback continuing to indicate demand in excess of supply. With this in mind, Mecardo takes a look at these premiums.
The wool industry has a long record of spending levy funds on marketing (Bob Richardson’s paper is a good primer on this (see more here)) and a record of much discussion about the merits and effects of marketing. Sceptical minds have thought for a long time that this focus on marketing is a distraction from the more mundane work of improving productivity and competing with alternative enterprises. The opportunity cost of spending funds on marketing is much reduction funds for driving on-farm productivity. ABARES shows productivity for a range of industries and regions on its website (see here). Sheep, which includes wool and lamb, do not perform well, which helps explain why sheep numbers are under such downward pressure.
Within the wool market, there is a pathway at present for marketing to add 5% and more (depending on the micron category) to sale receipts, although this will vary with the quality of the wool offered for sale, through being accredited to RWS (see here)
Figure 1 shows the median premiums for RWS-accredited wool for indicator (MPG) type merino fleece wool for the past three months (April to June 2025) from 15.5 to 20.5 micron in clean cents per kg. This shows current premium levels across micron ranges. The median price does not show the variation in premiums paid, which can be considerable, as Mecardo looked at in March (see article here). The median price for merino fleece in recent months has been around 100 cents per clean kg, plus or minus.
Figure 2 shows a similar analysis to Figure 1 but for crossbred fleece, running from 25 to 34 microns. The median premium is also around 100 cents per clean kg, keeping in mind that premiums do vary between lots. For crossbred wool, which has a lower price, this premium in proportional terms is much higher.
RWS premiums burst onto the Australian market in late 2021, at the time Cape Wools (see more here)/ started to publish weekly premiums from the South African auction market. Figure 3 shows a monthly average RWS premium series for South African and Australian 19 micron merino fleece from mid-2021 to June 2025. This analysis of RWS premiums across time shows significant variation. Premiums in 2021-22 were high and applied to wool generally without regard to quality. In 2022-23, premiums shrank and remained low through 2023-24. In 2024-25, premiums began to increase again, to levels shown in Figures 1 and 2.
In Australia, where accreditation to RWS must first overcome the issue of mulesing, premiums are required to ensure new volume continues to be added. A return to the low premiums of 2023-24 would severely limit any growth in RWS volumes in Australia and would most likely see a proportion of accredited farmers drop out of the system.
What does it mean?
RWS premiums are back to attractive levels, after spending late 2022 through to mid-2024 at low levels. This applies to merino and crossbred wool. They offer farmers a practical pathway to improve their wool price through marketing (themselves). The variation in premiums seen during the past four years has been concerning. This is something the supply chain will need to consider if it wants the supply of RWS to grow.
Key Points
- In recent months, median premiums for RWS fleece wool have been around 100 cents per clean kg for merino and crossbred.
- The range around the median premiums received by individual lots of wool remains substantial.
- RWS premiums began the 2024-25 season at low levels and trended higher as the season progressed, returning to mid-2022 levels
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: Cape Wools, RBS, AWEX, ICS, Mecardo
