Understanding the AWEX Eastern Market Indicator: What Drives Global Wool Prices?

If you follow wool market news, you’ve likely encountered the acronym EMI—the AWEX Eastern Market Indicator. When industry commentators report that “the EMI rose 358 cents over 11 weeks” or “dropped 48 cents this week,” what exactly are they measuring? And why should wool producers, traders, and industry professionals pay attention to an Australian price indicator?

The answer is straightforward: the EMI is the global benchmark for wool pricing, and understanding how it works gives you insight into the forces shaping the wool market.

What Is the AWEX-EMI?

The AWEX Eastern Market Indicator is a weekly price indicator published by AWEX (the Australian Wool Exchange), the official reporter of the Australian greasy wool market. Rather than tracking a single wool type, the EMI is a composite indicator—a broad average that reflects the overall movement of Australia’s entire wool market. It includes prices for Merino and non-Merino types; fleece wool, skirtings and cardings, all weighted into a single figure.

Since its introduction in 1979, the EMI has become the default price series for Australian greasy wool. More importantly, it functions as the world’s primary benchmark. Major economies monitor the EMI closely to understand global wool demand and pricing trends.

How Does It Work?

AWEX collects price data from every lot sold at wool auctions, the favoured method of trading wool in Australia.  Not all wool is used to calculate the AWEX-EMI; it is made up of a basket of types which represent the Australian wool clip.  This basket is calculated each sale day, giving you a figure that tells you whether the overall market is moving up or down. When the EMI rises, it typically signals increased demand or tightened supply. When it falls, the opposite is true.

However, there’s an important caveat: because the EMI is a broad average, it doesn’t always accurately reflect the price of specific wool types.  Similar to share/equity/stock market indicators, the EMI gives an overall guide to the health of the market but lacks the detail needed for individual wool types.  Finer Merino microns, for example, have seen their relationship with the EMI weaken over time. For precise pricing information on particular micron categories, AWEX publishes more granular Micron Price Guides (MPGs), which offer better accuracy for specific wool types.

What Drives the EMI?

Two fundamental forces shape the AWEX-EMI: supply and demand.

Supply is straightforward to measure. Over the past three decades, global wool production has declined significantly, while the AWEX-EMI has generally trended upward. Basic economics explains this: as supply tightens and fewer bales reach market, prices rise.

Demand, however, is more complex and hinges largely on global economic conditions. When major economies grow—when consumers have confidence and disposable income—they spend more on clothing, textiles, and luxury goods. Wool, positioned as a premium natural fibre and increasingly valued for sustainability, benefits from this spending. Conversely, during economic slowdowns, discretionary purchases decline, and wool demand softens.

China deserves special mention here. As the world’s largest buyer of Australian wool, Chinese demand has outsized influence on the AWEX-EMI. Government-driven uniform replacements, surges in activewear production, or shifts in manufacturing output directly move the needle. When China buys, the EMI climbs; when Chinese mills reduce purchases, prices fall globally.

Global Impact

The EMI’s reach extends far beyond Australia. Wool-producing countries from New Zealand to Uruguay to the UK monitor it as a pricing reference. When the AWEX-EMI is strong, these producers can command higher prices. When it weakens, they face headwinds.

Exchange rates also matter. A weaker Australian dollar makes Australian wool cheaper for foreign buyers, potentially boosting demand and the AWEX-EMI—which in turn affects pricing in other wool-producing regions competing for the same markets.

The Bottom Line

The AWEX-EMI is more than a number released each week. It’s a window into the global supply and demand equation, a reflection of Chinese industrial activity, an indicator of economic health in major consuming regions, and ultimately, a signal of where wool prices are headed. Understanding what moves the EMI—production volumes, global growth, currency fluctuations, and buyer sentiment—helps you make sense of market movements and anticipate trends.

For anyone in the wool industry, watching the AWEX-EMI isn’t optional. It’s essential intelligence.

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