Wool's benchmark Eastern Market Indicator (EMI) is tipped to rise over the next five years, reaching an average of 1903 cents a kilogram clean by 2026-27.
And for the end of the 2021-22 fiscal year, the national commodity forecaster ABARES, is predicting an average of 1390c/kg - a 16 per cent lift compared to 2020-21.
In 2022-23, wool prices are expected to lift 19pc to 1663c/kg, driven partly by a continued demand for fine and superfine wool.
On the back of strong economic growth in key wool markets, the wool market has made a recovery since the dip in prices during the initial wave of the COVID-19 pandemic, in which the EMI fell to 930c/kg in October 2021.
Since October 2021, 17-micron wool has increased by 47pc to January 2022, yet 28-micron wool has slipped by 33pc.
According to ABARES, the strong growth in fine wool prices reflects the surge in demand for apparel-grade wool.
Strong economic growth in advanced economies is also expected to lift prices and global demand for wool is expected to increase by 2.5pc in 2021-22.
But in 2022-23 wool consumption is expected to soften with a tapering in decline over subsequent years to 2026.27.
Australian shorn wool production is forecast to increase by 9.4pc to 320,000 tonnes by the end of 2022 on the back of wet conditions and a growing sheep flock as the national rebuild continues.
Despite a predicted decrease in average rainfall conditions, production is tipped to advance to 332,000 tonnes in 2022-23 with the Australian flock size predicted to increase a further 2.1pc to 71.9 million head in the same year.
However, global wool production is expected to continue its long-term decline. with substitution towards other natural and synthetic fibres to prevent dramatic increases in wool prices.
In 2021-2022, global wool production is only forecast to increase by 2pc to just over 1 million tonnes.
In Australia, wool cut per head is also forecast to drop 3pc to 4.4kg per sheep by the end of 2023.
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