A beginner’s guide to wool: Price, uses & market overview

Explore a thorough overview of the wool market, learn how it works in simple terms and get to grips with its significance as a popular global commodity.
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Written on Dec 18, 2023
Reading time 5 minutes

On this page, we explore everything you need to know about wool. Gain insights into wool market trends, pricing mechanisms, and the environmental impact of wool. 

Read on to learn more about this popular commodity and find links to beginner friendly guides explaining how you can get involved in wool. 

What is wool?

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Wool is a natural fibre obtained from sheep and other animals. It has provided protection, warmth, and clothing for humans since ancient civilisations. Sheep were first used for meat and milk in Asia over 10,000 years ago, but people soon discovered the properties of wool as protection from the cold while remaining breathable in heat. 

Today wool is one of the most popular fibres in the world with capabilities that outmatch synthetic materials. However, wool goes beyond clothing and is used in various industries from home furnishing to noise reduction and medical ointments to lubricants.

With such versatility, sustainability, and environmentally friendly features, wool has seen somewhat of a resurgence in recent years, especially versus man-made acrylic or microfiber garments. 

Wool market overview

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The wool market is vast and is worth $37.6 billion in 2025. That figure is expected to grow to $44.2 billion by 2028. It is an essential global commodity both economically and culturally. Over 1.1 million metric tonnes of wool are produced annually. 

The world’s largest producers of wool are Australia, China, and New Zealand. South American countries such as Uraguay are beginning to direct global supply thanks to being major sheep-farming hubs. 

Most wool trading takes place in auction houses where buyers and sellers bid on a large scale. However, it is possible to trade wool futures contracts at the Australian Securities Exchange and the Sydney Futures Exchange. There are six different types of wool futures available on both exchanges. The wool prices are quoted in Australian dollars. 

Is wool valuable? 

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Yes, wool is a valuable commodity and there are numerous reasons why investors are attracted to the market. We have highlighted some of these key fundamentals below, explaining what they are and why they matter.

  • Wool is natural and sustainable. Wool is a natural fibre that comes from a sheep’s fleece. This makes it sustainable and environmentally friendly. Compared to synthetic materials, wool is biodegradable and renewable and does not produce harm to the environment when being produced or disposed of.
  • It’s a long-lasting material. Wool is durable and can withstand wear and tear. It is resistant to pilling and abrasion and is a popular choice for clothing and textiles because of its characteristics.
  • Wool is a versatile fibre. Wool is versatile and can be used for many different applications. While best known as a clothing material, wool is also used in bedding, upholstery, and for industrial fabrics. It is also suitable for fire-resistant clothing. 
  • Wool prices have been rising. Without sheep, it is not possible to produce wool. With populations growing around the world and demand from India and China increasing, the price of wool has been increasing. Sheep stocks have been declining in recent years, pushing prices even higher.

How to invest in wool

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You can invest in wool by using a commodity trading platform. These platforms offer a range of commodities and are very easy to use. There are different platforms suitable for specific requirements. 

Some let you buy wool, others let you trade wool, and many are designed for investing in the grain. Visit our dedicated guide to discover how to invest in wool.

Wool in your investment portfolio

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A diverse investment portfolio can help protect you during market uncertainty, and the inclusion of wool can add value while allowing you to spread your money across various markets. 

Wool often moves independently to traditional investments like stocks and bonds. You can include wool in your portfolio as a hedge against potential losses. During times of economic uncertainty, investors view commodity grains such as wool as attractive options. 

Wool vs other commodities

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Wool is an agricultural commodity. Each commodity is unique in its own way and offers different features for investors and traders. You can learn more about specific commodities using our dedicated guides below. 

  • Wheat. Wheat is a grain that is grown around the world and is used for various foods. 
  • Corn. Corn is one of the most versatile commodities with many uses, including livestock feed, biofuel, oil, and food. 
  • Rice. Rice is the most popular grain commodity and a staple for half the world’s population 
  • Soybean. Soybean is a major global commodity used for livestock feed and cooking oil.

FAQs

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01

What is the market for wool?

02

Where does the UK get its wool?

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Where does the United States get its wool?

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What country buys the most wool?

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Why is Australian wool so prominent?


Sources & references

Prash Raval

Prash Raval

Financial Writer

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Prash is a financial writer for Invezz covering FX, the stock market and investing. For over a decade he has traded spot FX full time while running an educational service helping novice traders learn the markets. He has a keen interest in micro and small cap stocks....