NZ wool prices slip at auction on higher Kiwi dollar
By Tina Morrison
April 1 (BusinessDesk) - New Zealand wool prices slipped at this week's auction as a higher New Zealand dollar made the fibre less attractive to overseas buyers.
Coarse crossbred wool declined to $5.53 per kilogram at yesterday's North Island auction from $5.69/kg at last week's South Island auction, according to AgriHQ. Lamb wool slid to $6.15/kg from $6.41/kg last week.
The New Zealand dollar has strengthened over the past week, pushing above 69 US cents and hitting its highest level in nine months, as traders pulled back their expectations for further interest rate hikes in the US, damping demand for the greenback. That's made New Zealand wool exports more expensive for overseas buyers, given most commodity purchases are made in US dollars.
"All wool types generally dropped, with some significant price reductions made to poorer quality wool," said AgriHQ analyst Shaye Lee. "The main driver of the drop was a decline in buying power of major trading currencies against NZ dollars, putting downward pressure in local prices."
Limited competition between buyers meant just 86 percent of the 8,661 bales offered at auction were sold, Lee said.
Wool is New Zealand's 14th largest commodity export.