Wool Exports Hold
Wool exports are holding their value despite major currency movements in the last 12 months, according to figures released by WoolPro.
In the year ended February 2001, wool exports grew in volume by 1 per cent and value by 11.6 per cent, to reach $845 million.
But WoolPro economist Hunter Humphries says that when these figures are adjusted by the movement in the Wool Trade Weighted Index the increase in value falls to 1 per cent.
“In other words, when you take into account currency movements, the real value of a kilogram of average New Zealand wool – if there was such a thing – has held its value in the last 12 months,” he says.
“The New Zealand dollar declined dramatically against the US dollar – the main currency by which wool is traded – in the year to February, but this appears to have had little or no effect on the overall value of New Zealand wool.”
The remarkable stability in average prices masks some quite large upward movements in the fine, medium and lambs wool price indicators so far this season.
“Since the season began in July 2000, there has been a decline in both the volume of wool sold by farmers and in the volume exported of about 7 per cent. In the same period, the value of exports has increased by 8 per cent,” says Mr Humphries.
A continuation of this positive trend depends largely on the timing of purchases by China, our largest wool market.
Exports to China were up 1 per cent by volume and 20 per cent by value in the year ended 28 February. This was despite a marked drop in exports between November 2000 and February 2001, after Chinese import quotas for the 2000 year were filled.
At the end of January this year, China allocated new import quotas. Since then there has been a strong upswing in prices for types preferred by China and particularly for lambs wool.
Exports to the United Kingdom, New Zealand’s second largest wool customer, have increased 17 per cent by volume and 20 per cent by value in the year ended February.
“This is a very strong result, given the stable carpet market in the United Kingdom and the fact that there has been no significant increase in the affordability of NZ wool in British pounds,” says Mr Humphries.
“It is likely that exports to the UK will pick up further as a result of foot and mouth disease which is likely to result in a permanent drop in British sheep numbers and wool production.”