According to Australian Wool Innovation (AWI) commentary for week 38 (March 2026), the Eastern Market Indicator (EMI) fell by 32 Australian cents/kg, while the Western Market Indicator (WMI) dropped more sharply by 69 cents, signalling comparatively weaker conditions in Fremantle.

Australia’s wool market declined this week, ending a recent rally as weaker buyer sentiment and margin pressures weighed on prices.
The EMI fell 32 cents and WMI dropped 69 cents, led by losses in Merino wools.
Softer demand, higher supply, and a stronger Australian dollar pressured the market, though selective buying for quality lots persisted.

“Losses were led by medium Merino wools, which fell 70–75 cents in the eastern centres and 85–90 cents in the west. Finer Merino types also declined by 45–60 cents across all regions. Crossbred wool prices eased by 25–30 cents. In the carding segment, eastern markets remained steady to 5 cents higher, while Fremantle saw a sharper fall of around 45 cents,” the AWI Limited said in its Commentary.

The uniform decline across Merino fleece categories points to a broader pullback in buyer demand rather than isolated weakness. This follows several weeks of strong gains after the Chinese New Year period, with much of the earlier purchases still moving through processing and manufacturing stages.

Market sentiment this week reflected growing caution among exporters and processors facing tighter margins due to rising input costs. Increased wool offerings further reduced buyer urgency, while a firmer Australian dollar added pressure on export competitiveness, the AWI commentary noted.

Despite the overall softer trend, demand remained relatively firm for well-prepared, lower-risk lots, indicating that buyers are becoming more selective rather than exiting the market entirely.

Industry observers view the current downturn as a phase of consolidation, with the market testing resistance levels after recent gains, rather than signalling a fundamental shift in demand.

Looking ahead, all three auction centres will operate on a Tuesday-Wednesday schedule next week, with 40,909 bales expected to be offered.

Market direction will depend on the trade’s ability to absorb current supply levels and navigate prevailing cost pressures.

Fibre2Fashion News Desk (CG)

The most traded May 2026 contract settled at 68.70 cents per pound, down 0.07 cent. May contract has maintained a gain of 353 points despite slight fall. The contract had witnessed rally during the last five trading sessions.

ICE cotton futures paused after hitting an 8-month high, pressured by a stronger US dollar and profit booking.
The May 2026 contract settled at 68.70 cents per pound.
Rising crude oil capped losses by supporting cotton over polyester.
Lower volumes but higher open interest signalled fresh positions, while markets await the USDA report for direction.

Middle East tensions increased risks to energy supply, pushing Brent crude prices higher. Higher crude oil prices raised polyester production costs, making cotton relatively more competitive and providing indirect price support.

Market pressure was mainly due to a stronger US dollar, which recovered after the Federal Reserve kept interest rates unchanged, reversing prior weakness. The stronger dollar made US cotton more expensive for overseas buyers, weighing on demand sentiment.

Trading volume stood at 86,811 contracts, lowest in last 3 sessions, indicating lighter market participation. Open interest increased by 2,046 to 341,326 contracts, suggesting fresh positions and continued market involvement. Certified stocks unchanged at 116,789 bales as per ICE data on March 17, indicating no immediate supply pressure

Cotton rallied strongly over the past several sessions, driven largely by speculative short covering, pushing prices to multi-month highs. Current dip reflects mild profit booking and signs that short covering may be slowing or nearing completion.

Market analysts stated that the recent rally triggered significant short covering, but the future direction will depend on how speculative positions evolve next week. Mills were previously complacent with low inventories, but sudden price rise forced them to re-enter the market and cover demand.

Market participants are awaiting the next USDA export sales report for fresh direction.

This morning (Indian Standard Time), ICE cotton for May 2026 was traded at 68.13 cents per pound (down 0.57 cent), cash cotton at 67.95 cents (unchanged), the July 2026 contract at 69.95 cents (down 0.62 cent), the October 2026 contract at 71.99 cents (down 0.13 cent), the December 2026 at 72.12 cents (down 0.52 cent) and the March 2027 contract at 72.99 cents (down 0.48 cent)). A few contracts remained at their previous closing levels, with no trading recorded so far today.

Fibre2Fashion News Desk (KUL)

This is not a geopolitics story. It is a commercial repricing event. Every apparel brand, textile manufacturer, and sourcing office that ships through or near the Persian Gulf is now operating under a fundamentally different cost structure—one built on three stacking surcharge layers that function as a de facto war tax on every garment moving from East to the West.

Layer * — War Risk Insurance. The London insurance market’s Joint War Committee expanded designated war-risk zones across the Persian Gulf. All major P&I clubs cancelled war risk cover effective midnight March *. New policies emerged at * per cent of vessel hull replacement value — up from *.** per cent pre-conflict, a fourfold increase. Some premiums surged over *,*** per cent. The crisis grew so acute that Washington launched a $** billion reinsurance programme through the Development Finance Corporation (DFC), with Chubb as lead underwriter, according to the DFC.