NZ wool prices ahead of year earlier levels amid limited supply, continued demand
By Tina Morrison
Aug. 14 (BusinessDesk) - New Zealand wool prices were little changed at the latest weekly auction, but are ahead of year earlier levels, underpinned by limited supply and strong demand.
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, was unchanged at $6.15 per kilogram at yesterday’s North Island auction compared with the previous week's South Island auction, but 5.1 percent ahead of the $5.85/kg it sold for at the same time last year, according to AgriHQ. The price for lamb wool held at $7.20/kg from the previous week's auction, and was up 31 percent from $5.50/kg a year earlier.
Demand for wool remained strong, with 98 percent of the 9,201 bales sold at auction and most prices either holding steady or increasing. A decline in the value of the Chinese currency this week, after the People's Bank of China allowed it to trade more in line with the market, didn't dent demand from the country's largest market.
"There was little impact of the devaluation of the Chinese yuan at the auction as the majority of exporters chose to purchase wool for immediate shipment so as to cover their contracts," said AgriHQ analyst Emma Dent. "Exporters are aware of the shortage of wool in stores and don’t want to be caught out should supplies at auctions decline."
Wool brokers said there was strong demand from China for hogget wool and from Europe for second-shear, aided by the lower value of the New Zealand dollar.
The next sale, also for about 9,200 bales, is scheduled for Aug. 20 in the South Island.