NZ wool prices ease from highs in latest auction

Friday 12th June 2015

New Zealand wool prices eased from recent highs at auction this week as shorter wool failed to attract the same premium as longer wool on offer the previous week.

Lamb wool slipped to $7.40 per kilogram at yesterday's North Island auction, from a record $7.45/kg at the South Island auction the previous week, according to AgriHQ. 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, declined to $6/kg, snapping a three-week stretch were it held at $6.20/kg, the highest level since November 2013.

Wool prices softened this week even as a decline in the New Zealand dollar made it more competitive for overseas buyers. That's because much of the offering at this week's North Island auction was coarse second-shear wool, compared with the more varied longer selection on sale at the previous week's South Island auction, according to exporter New Zealand Wool Services International.

When compared to the last North Island sale on May 28 when a comparable selection was offered, prices were generally firm to dearer, NZWSI general manager John Dawson said in a statement.

Some 9,400 bales were offered at auction yesterday, up from 6,876 bales last week, although next week's scheduled South Island auction has been cancelled due to insufficient wool. Demand remained strong at this week's auction, with 98 percent of the wool offered at auction sold yesterday, the 10th straight week the auction clearance rate has held above 90 percent.

The next auction on June 25 and will have about 6,150 bales from the South Island and 10,800 bales from the North Island.

Wool is New Zealand's 13th biggest commodity export, and the value of exports has been rising as the national wool clip declines following a drop in sheep numbers.

BusinessDesk.co.nz

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