Clearer signals for Australian woolgrowers as the market lifts in 2025
The AWI monthly market report rounding off 2025 indicated that the 2025 wool market looked to be finished on firmer ground, with stronger prices, renewed demand for mid‑micron Merino and deeper engagement with China’s processing sector. Supported by improved producer sentiment and international exchange programs, the industry should enter 2026 with steadier footing and cautious optimism, the report noted.
After several challenging seasons marked by dry conditions, subdued fleece prices and lower Merino marking rates, 2025 is finishing on a noticeably firmer footing for Australia’s wool industry. While the year has not been without its pressures, the tone across the market — and indeed across the supply chain — has sharpened.
Prices have improved, demand has strengthened in ways that will carry weight well beyond the current selling season. The benchmark Eastern Market Indicator (EMI) provides the clearest snapshot of this shift. In January, the EMI lingered in the high‑1100s to low‑1200s — a modest improvement on the lows of late 2024, but not enough to give growers real confidence. As autumn progressed, there were small but consistent signs of renewed competition. By September, the EMI had risen to 1,319c/kg clean, its highest point in more than two years. The momentum continued into early October, when the indicator reached roughly 1,565c/kg clean — the strongest level since 2021.
Although the market eased slightly afterwards, it retained much of that gain, with the EMI holding in the 1400s through November and early December. For many growers, wool cheques in the back half of the year looked materially different to those in the front half. Behind this recovery sits a clear pattern in micron demand.
Fine and superfine fleece — 17 to 18 microns — faced a slower start to the year, influenced by patchy demand from the European luxury market and higher volumes of fine wool in the system.
In contrast, the 18.5‑to‑22‑micron band led the market higher. These well‑grown, versatile Merino fleece types consistently attracted strong buyer interest, shaping much of the EMI lift throughout winter and spring. Scarcity also played its part.
AWEX data shows the national average fleece micron at around 18.5 to 19‑micron, and at several points in 2025, 21–22‑micron wools were so limited in some selling centres that formal MPG quotes were not always possible. Broader Merino and crossbred categories saw steady improvement too, reaching price levels not seen for several years. Together, these factors helped stabilise the market and restore a measure of confidence.
That improved outlook is also evident on‑farm. The latest MLA/AWI Sheep Producers Intentions Survey recorded the strongest results since the survey was redesigned, with overall producer sentiment rising to +78 and wool‑sector sentiment improving significantly. Despite another tough year for Merino marking rates — averaging around 74%— more than half of producers surveyed indicated plans to increase lamb numbers in 2026.
Importantly, the proportion of Merino ewes joined to Merino rams continues to grow. This suggests producers are consolidating around reliable, dual‑purpose Merino genetics that have performed consistently through varied seasons. While domestic sentiment has strengthened, some of the clearest signals of long‑term confidence came from international engagement.
Two Future Wool Industry Leaders Tours were delivered — one in May and another in September — supported by the Australian Government’s National Foundation for Australia–China Relations (the Foundation) and organised by AWI. These programs provided emerging Australian industry participants with a rare, comprehensive view of China’s wool‑processing and textile pipeline.
Participants visited early‑stage processing, combing and spinning facilities, garment and textile manufacturers, and major retail hubs. Many described the experience as invaluable for both business and cultural exchange. As one participant told ABC Rural after the September tour, “The biggest takeaway for me was the scale and investment the Chinese have put into the industry, and how much value they place on Australian wool.” Others remarked on how seeing the entire pipeline — from greasy wool to finished product — clarified the depth of interdependence between Australian producers and Chinese processors. That interdependence was reinforced in March, when a reciprocal delegation of young Chinese wool‑industry leaders travelled through Australia. Their visit — also supported by the Foundation and facilitated by AWI — included time on Australian farms, in shearing shed and sheep shows at wool testing facilities and in the auction rooms. For many, it was their first direct experience with Australian wool production. The professionalism, quality assurance and transparency of Australian systems left a important impression, with several visitors noting the trip strengthened their confidence in long‑term partnerships.
As 2025 closes, the Merino sector stands at a more stable point than a year ago. Prices have regained ground. Demand for mid‑micron Merino types has strengthened and flock sentiment has lifted. If seasonal conditions improve 2026 could well mark the beginning of a more balanced chapter ahead for the Australian wool market.
Source: AWI