NZ wool prices drop at auction as demand softens during European holiday period

Friday 19th August 2016

The European summer holiday period kept some wool buyers out of the New Zealand market this week, denting demand for fine crossbred wool.

The price for 35-micron wool fell to $5.50 a kilogram at yesterday's South Island wool auction from $5.55/kg when it was last traded at the previous South Island auction two weeks ago, according to AgriHQ.

"European demand mainly drove the activity for fine crossbreds, so the slight easing of 35-microns wasn’t unexpected, taking into account it’s currently a holiday season in the European countries," said AgriHQ analyst Shaye Lee. "Slightly softened market conditions led to prices generally retreating."

Based on the indicator reading, mid-micron wool overall gained about 3 percent on auctions over the past two weeks. The price for 29-micron wool lifted to $8.60/kg, 40c/kg higher than the past two weeks, AgriHQ said. Meanwhile, strong crossbred wool generally held steady from last week, with 39-micron fibres unchanged at $5.45/kg.

Some 72 percent of the 6,470 bales on offer were sold at auction, down from a 74 percent clearance rate at the equivalent South Island auction two weeks ago. The next sale on Aug. 25 will offer about 5,300 bales from the South Island, which is 35 percent below the level anticipated due to adverse weather conditions, according to New Zealand Wool Services International.

(BusinessDesk)

BusinessDesk.co.nz

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