NZ wool prices advance at auction as supplies dwindle

Friday 06 May 2016 02:42 PM

NZ wool prices advance at auction as supplies dwindle

By Tina Morrison

May 6 (BusinessDesk) - New Zealand wool prices advanced at auction this week as a seasonal drop in supply bolstered the market.

Strong wool of 39 microns gained to $5.85 per kilogram at yesterday's South Island auction, from $5.55/kg at last week's North Island auction, according to AgriHQ. Second shear wool of 37 microns traded at $5.80/kg, up from $5.45/kg last week, while lamb wool of 30 microns lifted to $6.45/kg from $6.10/kg.

Dwindling supplies helped underpin prices, with just 4,700 wool bales offered for sale at the latest auction, the lowest level so far this season and well down on the seasonal peak in late January when a combined North and South Island auction saw a total of 19,864 bales on offer. Next week's North Island sale is expected to include about 4,750 bales, down 37 percent on anticipated rostered quantity. Analysts said some growers may be holding back wool after a recent easing of prices in anticipation of a recovery, suggesting volumes may pick up again, although drought conditions in some areas had reduced stock numbers and fleece weights.

"Wool generally lifted at this week’s South Island auction" amid steady demand from Western Europe and Australasia, said AgriHQ analyst Shaye Lee. "The market was well supported even with softer Chinese demand because of lower seasonal supply and steady demand coming from other international buyers."

Some 85.6 percent of the bales on offer were sold at yesterday's auction. High clearance rates in recent times mean there is a lack of 'passed in' bales in brokers' and merchants' stores to top up volumes, analysts said.

(BusinessDesk)

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