NZ wool prices mixed amid larger volumes, weaker currency

Friday 15th January 2016

New Zealand wool prices were mixed at the latest weekly auctions as larger volumes during a seasonal peak offset some of the benefits of a weaker currency.

The price for clean 35-micron wool, a benchmark for crossbred wool used for carpets and accounting for the majority of New Zealand's production, edged up to an average $5.87 per kilogram at yesterday's wool auctions, ahead of $5.80/kg at auction last week, and 15 percent up on the same time last year, according to AgriHQ. Meanwhile, lamb wool held steady at $7.30/kg, 22 percent ahead of this time last year.

A weaker New Zealand dollar, which has shed 2.8 percent on a trade-weighted basis so far this year, has helped underpin wool export prices by making the fibre cheaper for overseas buyers. However wool production is currently at its peak during the main shearing season from December to early February, with the higher volumes offsetting some of the gains. This week’s combined North and South Island auction saw a total of 16,536 bales of wool on offer, the biggest auction volume for the season so far.

"There was good local and international demand which saw 95.6 percent of bales sold," said AgriHQ analyst Emma Dent. "There were a variety of price movements, with some wool types increasing due to currency factors while others decreased due to larger volumes."

Next week’s North Island auction consists of roughly 7,600 bales.

The value of New Zealand wool exports rose 9.9 percent to $814 million in the 12 months to the end of November, making it the country's 14th largest commodity export, according to the latest Statistics NZ data.

BusinessDesk.co.nz

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