NZ wool prices slip on higher auction volumes

Friday 4th March 2016

New Zealand wool prices slipped at auction yesterday on higher volumes.

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, sank to $5.85 per kilogram at auction yesterday, from $5.95/kg last week, according to AgriHQ. Lambs wool dropped for the sixth straight week to $6.45/kg, from $6.60/kg last week, but remains 5 cents/kg higher than a year ago.

Still, the prices at auction exceeded expectations given the larger quantities on offer, said AgriHQ analyst Reece Brick. A mixture of new business and older contracts supported the market, he said.

A total of 18,486 bales were offered at yesterday's auctions in the North and South Islands, the second highest auction volume this season after 19,864 bales went up for auction across both islands on Jan. 28. The 87.5 percent clearance rate for the latest auctions was similar to last week's 89 percent rate.

Wool prices across the board fell by 1-to-2 percent in the South Island on last week, but North Island returns were generally 2-to-5 percent better than the previous North Island auction of Feb. 18, AgriHQ said.

The overall auction price for greasy wool in the 2015/16 season is forecast to increase 6.5 percent on last season, reflecting an improvement in global wool prices, driven by better demand, lower supplies and a more favourable exchange rate, according to a report published by the Beef + Lamb New Zealand Economic Service this week. The price for fine and strong micron wool are both expected to increase 5.2 percent on the year earlier, while medium micron wool is forecast to jump 15 percent.

BusinessDesk.co.nz

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