The Eastern Market Indicator (EMI) wool price is estimated to have increased by 22 per cent in 2017–18 to average 1,723 cents per kilogram. Recent rises in the EMI mostly ref lect strong demand for superfine wool (less than 19.5 microns) and slow supply growth placing further upward pressure on prices.
A trend towards crossbreeding for sheep meat production over the last decade has increased the proportion of coarser wools in absolute terms and as a proportion of Australia’s total wool clip. In the 12 months to May 2018, average prices received for wool of different classes have continued to diverge. The average price of 17-micron wool was 27 per cent higher and 25-micron wool 37 per cent higher year-on-year. In contrast, the average price of 32-micron wool was down 3.8 per cent year-on-year.
In 2018–19 the EMI is forecast to rise by 16 per cent to average 1,990 cents per kilogram. This forecast mainly reflects limited growth in the global supply of superfine and fine wool, which is mostly produced in Australia. Global demand for wool is expected to be sustained over the outlook period. If realised, this forecast would see the EMI reach its highest point in real terms since 1988–89. However, it would still be 24 per cent below
the record 2,612 cents per kilogram (2017–18 dollars) averaged in 1987–88.