China bought 88.4% of Australia's wool exports in 2025/26, according to Australian Wool Innovation (AWI). The dependency underpins a rally that pushed the season's benchmark price up 61%.
Key Facts
- China bought 88.4% of Australia's wool exports in 2025/26, according to AWI.
- The season's price rally, up 61% to 1,943c/kg, tracks closely with Chinese buying.
- Chinese textile inventories sit at historic lows, WoolProducers warns, raising risk of a fast pullback.
Most Australian wool is exported raw and processed into apparel in China. The country's four largest mills now dominate that processing, according to AWI director Neil Jackson.
Two of those mills have each invested more than $150 million in automation upgrades. Workforces that once numbered 8,000 to 10,000 employees have dropped to about 500, per Jackson.
China's Wool Processing Has Consolidated to Four Major Mills
Uniqlo is the single largest brand buyer of Australian wool, purchasing around 20,000 bales. The retailer has dedicated two full aisles of its flagship Shanghai store to Merino. ANTA Sports operates roughly 1,000 stores in China. It has also increased its use of the fibre.
Jackson said AWI now fields calls from chief executives rather than sustainability managers, calling the shift "a great story."
Chinese Demand Has Driven This Season's 61% Price Rally
The dependency has paid off this season. The Eastern Market Indicator (EMI) climbed from 1,207 cents to 1,943 cents per kilogram clean by the June 25 close, per AWEX. That's a 61% gain for the season.
The season's total auction value reached A$2.614 billion, up A$675 million from the previous season. Fewer bales were offered this year. The EMI also gained 557 US cents, up 71% for the season.
AWI chairman George Millington described the market as "bucking the trend up to levels not seen since May 2019."
Tight domestic supply amplified the effect. Shorn wool production fell 12.6% year-on-year to about 244.7 million kilograms greasy in 2025/26, according to the Australian Wool Production Forecasting Committee.
Growers Face Risk From Reliance on a Single Buyer
The concentration carries risk. Chinese textile inventories sit at historic lows, according to WoolProducers Australia. Low inventories can fuel buying surges.
Once restocked, WoolProducers warned, imports could taper off abruptly.
WoolProducers is working to diversify export markets. The effort aims to reduce reliance on any single buyer. The group is expanding trade access under the Commonwealth's Accessing New Markets Initiative, with further details expected in the coming months.
The market has already cooled since its June peak.
AWEX attributed the pullback mainly to a stronger Australian dollar and increased seller caution, not a shift in Chinese buying. The EMI fell 116 cents over the last 10 selling days, closing the series before the mid-year recess at 1,873 cents per kilogram clean on July 24. Sales resume in the week beginning Monday, August 17.
