Australian wool exports face headwinds

Australian wool auctions revealed a complex situation. A stronger Australian dollar reduced profits for local sellers despite steady participation from traditional buyers. Prices fell 20 cents per clean kilogram, leading some sellers to hold onto their wool.

China remained a key player, with their buying activity keeping the market stable. Interestingly, there was strong competition for Merino wool between Chinese manufacturers and a local trader, although other major buyers showed less enthusiasm.

A worrying trend is the decline in demand for superfine Merino wool. With Europe and India taking a backseat, prices for this type of wool have stagnated. This is despite superfine Merino making up a growing share (34.2 per cent) of the total clip.

In contrast, fine and medium Merino wools attracted continued interest, although local prices dipped slightly. Broader wools, now a smaller portion of production (11.8 per cent), saw the least price decline, likely due to limited supply.