It's all processing. Wool is a free by-product, sheep have to be sheared. More than 20 years ago, it was a pretty lump sum for someone who would shear 10K sheep a year. Still not much compared to the shearing price, but that helps sheep get more meat, reduce disease problems, and also reduce their size to the feeding stations. So a win for everybody.

Then, everything closed and the only thing left was to send it to China. Priced dropped entirely, to the point where it would mostly be considered a net negative. You have to store it before you can send a batch, and that takes a lot space. Not only that, but it has to stay dry. Then, consider you want to have a basic sort already done, because you don't want the whole batch to be paid little because it would be considered the lowest grade. So Bags should be consistent; they also have to be dense enough to avoid taking too much space (typical bags are around 1 cubic meter / 100kg). Most of these operation require quite a lot of very tiring human labor, which also require some skills, a problem pervasive with the sheep industry.

So yes, in the end it's too cheap to produce but too expensive to buy.

There's many grades of wool and the coarse ones really are very cheap. So cheap as to be used for carpet in government schools (in NZ/Australia).

Polyester ~$1000/MT, wool ~$15,000/MT. Polyester is cheap, barely more than it's feedstocks.

Polyester can be made 24/7 365 while wool comes in batches. Also, regardless of how low wool prices are, it will be more expensive than polyester components as the sheep require being fed and what not. Maybe polyester prices are affected by Hormuz closing????