Looking ahead, conditions could potentially remain broadly supportive, although further gains are likely to depend less on a simple recovery in demand and more on how tightly supply remains constrained and how external factors like currency affect prices.
Australia’s wool market has stabilised across early- to mid-2026, with prices holding at relatively high levels compared with recent years and confidence improving after two volatile seasons in a row, an ANZ Bank report said.
Prices may remain at relatively high levels in future, but with greater variability from week to week.
Price movements continue to be somewhat volatile.
The more stable pricing environment seen across early- to mid-2026 has been accompanied by greater variability from week to week.
Price movements continue to be somewhat volatile, with outcomes increasingly shaped by currency movements and the mix of wool offered at auction, rather than simply by any major shift in underlying demand.
Auction results across April and early May reflected this more balanced but uneven environment.
Auction volumes remained relatively low across April and early May, with weekly offerings around 30,000-35,000 bales and pass in rates generally below 10 per cent, limiting the amount of wool available to the market.
This limited supply has contributed to greater variability in auction outcomes, with price movements increasingly influenced by the composition of each week’s offering. As a result, sales have shown a wider spread in results, depending on wool quality and specifications, rather than a uniform movement across the market, the report noted.
The difference in prices between finer and broader wool types is evident in recent auction results.
Currency has continued to play a role in shaping weekly price movements as the market has moved higher. A stronger Australian dollar limited gains in local terms by reducing returns to exporters and tightening buyers’ margins, even where underlying demand remained steady. This meant that prices eased at times in Australian dollar terms while holding firmer in US dollar terms.
In practical terms, currency has acted as a constraint on further price increases, rather than signalling any weakening in demand, said the report by the multinational banking and financial services company ANZ Bank.
At a broader level, the market continues to be supported by a relatively tight supply base. Wool production is expected to ease slightly across 2025-26, alongside a smaller national flock compared with recent years, limiting the potential for any significant lift in supply in the near term.
This is consistent with conditions seen at auction, where limited volumes of higher quality wool continue to attract competition, even as overall results vary from week to week.
Prices may remain at relatively high levels in future compared with recent years, but with greater variability from week to week.
Periods of firming are likely when competition for available wool increases, particularly where quality is limited, while short term corrections could occur when the Australian dollar strengthens or when a broader mix of wool is offered.
The interaction between supply, quality and currency will remain central to price direction over the remainder of 2026. For producers, this points to a market where overall price levels could well be supportive, but where realised outcomes could depend increasingly on clip characteristics and preparation, the report added.
Fibre2Fashion News Desk (DS)
