Independent analyst Andrew Woods of Independent Commodity Services examines AWEX’s Micron Price Guides across regions, explaining how consistent indicator design enables comparison while timing effects and market conditions influence observed price differences.
Key points:
- AWEX Micron Price Guides have an identical structure between regions, and are designed for direct comparison.
- Except in trending markets the main western MPGs are generally close to comparable northern and southern MPGs.
The Australian Wool Exchange’s (AWEX) Micron Price Guides (MPGs) are structured to give an indicative price for a typical 12 month grown fleece for a specific micron, with identical structures between regions in order to allow direct comparisons across the selling centres.
Put simply, for MPGs, wool quality is controlled in order to observe price.
After allowing for breed and staple length, which can determine the type of processing and/or the end use wool is suitable for, fibre diameter is the major determinant of value. For a given number of fibres in the cross section of yarn, fibre diameter determines the fabric weight. During the 1980s, fabric weights trended lower. The rate of fall slowed in the 1990s but continued, for both worsted and woollen apparel. This fall in fabric weight underpinned the growth in micron premiums and discounts which effectively tripled in the early/mid-1980s from the average levels of the three previous decades.
Given that background to the importance of fibre diameter in wool valuations, the AWEX MPGs1, are set up to reflect the key driver of wool price. While the wool used to develop the MPGs varies slightly in terms of staple length and strength between micron categories, the main difference is fibre diameter, after dividing the MPGs into Merino and crossbred groups. On that point the AWEX 23 and 24 MPGs are still merino based indicators (seldom quoted) for a section of the market which is now crossbred.
The graph opposite compares the 19.5 MPG from the three regions (the selling centres which are now Sydney, Melbourne and Fremantle) from 2001 onwards, in monthly average form. As expected, the price for full length, sound 19.5 micron merino fleece is very similar across the three selling centres.
Graph showing AWEX regional 19.5 MPG for western, northern and southern regions between July 2002 and July 2025. Source: AWEX.
This graph looks at the difference between the northern and southern 19.5 MPGs to the western 19.5 MPG using the data from the graph above. There is often a timing issue when comparing Fremantle prices to the east in a market that is trending. In the international market greasy wool prices will come in first from New Zealand, then eastern Australia, then Western Australia followed by South Africa and South America.
Graph comparing the difference between the northern and southern 19.5 MPGs to the western 19.5 MPG. Source: AWEX.
Buying limits can change during a sale, so they can easily change between regions with time differences such as eastern Western Australia. The time difference helps explain some of the larger variation seen in Figure 2 in recent years. In 2019 as the market trended lower on a given sale day Fremantle would sell last and have the lower (bigger discounted) price. In 2022 and 2023 the reverse occurred as the market rallied. In summary from Figure 2 it seems the western 19.5 MPG is usually within 20 cents of the northern and southern 19.5 MPGs.
What does this mean?
The AWEX MPGs are designed to be comparable between centres, with identical structures, as opposed to the regional market indicators which simply reflect the overall value of wool being sold in the different regions (variable quality). Sometimes generating quotes to build MPGs can be challenging in a region, such as in 2025 when yields in Melbourne fell to extremely low levels or in late 2024 when staple strength fell to very low levels in Fremantle. So, while some human smoothing of data will occasionally be required, the main merino MPGs in Fremantle tend to align with comparable northern and southern MPGs, albeit trending markets being the exception.
References:
1. AWEX Micron Price Guides.
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