March’s wool market update

Highlights for wool

• The Australian wool market remained in a holding pattern throughout February. The market faced pressure from a mild strengthening of the Australian Dollar and slightly higher supply. But weakness in the Australian Dollar at the end of February and tighter supply supported prices in the first selling week of March. The AWEX EMI is currently at 1,225 c/kg, marking a 10 cent increase since the start of February. At this level, the AWEX EMI is up 53 cents year-on-year.
• Wool prices are expected to be steady over the next few weeks, with supply expected to continue at the lower level. While buyers will be waiting for an uptick in demand downstream before committing further. There will be a continued focus on any developments in the US-China trade situation. China is the largest exporter of Australian wool, so any impact on the Chinese economy is likely to influence wool markets.
• Currency movements were detrimental to the market throughout February. The Australian Dollar firmed from 62.25 USc to 63.64 USc between the end of January and the third selling week of February. The AUD then fell sharply to finish the month, resulting in a strengthening of prices to start March.

Joe Boyle

Agricultural Analyst

Joe is our Insights specialist for sheep and wool industries. He hails from a cropping and sheep farm in northwestern Victoria and has studied a Bachelor of Agriculture at the University of Melbourne.