NZ lamb wool price picks up as fewer wool bales offered at auction

Friday 24th February 2017

New Zealand lamb wool prices picked up as the volume of bales offered for sale at auction declined.

The price for 30-micron lamb wool increased to $3.90 a kilogram at yesterday's South Island auction, up from $3.55/kg last week, although it remains 42 percent below year-earlier levels and 29 percent down on the five-year average, according to AgriHQ.

Other wool prices also lifted, with 35-micron fine crossbred fibre increasing to $3.85/kg from $3.75/kg, and stronger 39-micron crossbred wool lifting to $3.60/kg from $3.50/kg, AgriHQ said.

New Zealand is at the tail end of its main sheep shearing season which typically runs from December to early February. Lamb wool reached record highs of $7.50/kg last season, however market conditions are less buoyant this season, amid lacklustre demand from China, New Zealand's largest export market. That's prompting woolgrowers to withdraw their bales from auction and hold them in storage in anticipation of higher prices at a later date. Just 4,627 wool bales were offered for sale at the latest auction, down from the 5,300 scheduled to be put up for sale.

"This was below anticipated levels as growers continue to hold back wool, further decreasing supply due to the return on wool not covering shearing costs," said AgriHQ analyst Sam Laurenson. "This resulted in an increase in the clearance rate, 85 percent for this week’s sale, this rate sits above the current clearance rate for the season to date of 75 percent."

The value of New Zealand wool exports slipped 18 percent last year to $666 million, pushing it two places down the commodity export rankings to 16th position.

BusinessDesk.co.nz

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