Australian wool prices decline this week as buyer caution ends rally

The Australian wool market recorded a broad-based decline this week, snapping a recent run of gains, as softer buyer sentiment and margin pressures weighed on prices across all three selling centres: Melbourne, Sydney and Fremantle.

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)