Why Knitwear Prices Are Rising in 2026: What Every Brand Needs to Know

Knitwear buyers across Europe, Australia, and the US are entering 2026 with a shared concern: why are prices rising so quickly, and why are quotations no longer consistent from month to month? As a manufacturer working directly with yarn mills and raw‑material suppliers, the picture is now clearer than ever, and the changes are significant.

This article explains what is happening in the Merino and cashmere markets, why your custom order and sample fees have increased, and why confirming orders earlier genuinely protects your budget.

The Raw‑Material Market Has Shifted Dramatically

Merino wool prices are climbing at the Australian auctions

Australia is the world’s primary source of Merino wool, and auction prices have surged throughout the 2025–2026 season.

Recent auction reports show:

• Strong, widespread competition pushing prices higher across all Merino fleece categories, with rises of 21–85 cents in a single selling series .

• The Eastern Market Indicator (EMI) climbing to 1,767c/kg, continuing an “upward surge” driven by tight supply and strong demand .

• The AWEX Wool Index reaching a six‑month high, with weekly increases as buyers chase limited supply .

• Improved Chinese demand adding further upward pressure, even with larger auction offerings and currency fluctuations .

• A broader trend of renewed confidence in Merino wool, with prices up more than 40% year‑on‑year in late 2025 .

When auction prices rise, every stage of the supply chain feels it — from greasy wool to scoured wool, to yarn spinning, and finally to garment production.

Cashmere prices are following a similar pattern

Cashmere has also seen steady increases due to limited supply, higher labour and processing costs, and stronger global demand. While cashmere is not traded through Australian auctions, the overall luxury fibre market tends to move together: when Merino rises sharply, cashmere rarely stays flat.

How This Translates Into Higher Yarn Prices

Yarn mills adjust their selling prices based on raw‑material costs. When the cost of greasy wool or cashmere rises, mills must revise their yarn quotations, often twice a month.

This means:

• Yarn prices are no longer stable for long periods.

• Mills are issuing frequent price adjustments, sometimes every two weeks.

• Manufacturers like us receive updated yarn quotations constantly, which directly affects your garment unit prices.

This is why your quotation today may not match the quotation you received last month — or even last week.

Why Your Custom‑Order Unit Prices and Sample Fees Have Increased

For brands, designers, and retailers, the most visible impact is on:

• Custom‑order unit prices

• Sample production fees

• MOQ‑based pricing

• Bulk‑order quotations

These increases are not due to changes in labour or factory margins. They are driven almost entirely by the rising cost of Merino and cashmere yarn.

When yarn mills raise their prices, manufacturers must adjust accordingly, otherwise the cost difference becomes unsustainable.

Why Ordering Earlier Saves You Money

Because yarn prices are changing twice a month, the timing of your order now plays a major role in your final cost.

Ordering earlier helps you:

• Lock in the current yarn price before the next increase.

• Avoid mid‑production price adjustments, which some mills now enforce.

• Secure production slots before peak season.

• Protect your budget for AW26 and SS27 planning.

For small‑to‑medium brands, this can make a meaningful difference, especially when producing multiple styles or colourways.

What European, Australian, and US Brands Should Expect in 2026

1. Continued price volatility

With auction prices still rising and demand remaining strong, volatility is likely to continue through 2026.

2. Higher competition for premium fibres

Chinese buyers have returned strongly to the market, increasing competition for high quality Merino and cashmere.

3. Shorter validity periods for quotations

Yarn mills are shortening quotation validity windows, which means manufacturers must do the same.

4. Greater emphasis on early planning

Brands that plan ahead, especially for AW collections, will secure better pricing and smoother production.

What Every Brand Should Do Now

• Confirm orders earlier to lock in yarn prices.

• Plan sampling timelines realistically, as sample fees reflect current yarn costs.

• Expect quotation updates and treat them as normal in today’s market.

• Communicate internally so your design, buying, and finance teams understand the new pricing environment.

The rising cost of Merino and cashmere is not a temporary fluctuation, it is a structural shift driven by global demand, limited supply, and auction‑driven pricing. For brands in Europe, Australia, and the US, understanding this landscape is essential for budgeting, planning, and maintaining healthy margins.

If you’re preparing your AW26 or SS27 collections, it may be helpful to know which styles you’re prioritising first so we can secure yarn pricing accordingly.