NZ wool prices fall at auction on stronger kiwi dollar

Friday 01 July 2016 01:39 PM

NZ wool prices fall at auction on stronger kiwi dollar, mixed quality

By Tina Morrison

July 1 (BusinessDesk) - New Zealand wool prices fell at yesterday's South Island auction, hurt by a stronger local currency and mixed fibre quality.

The 35-micron strong wool price slid to $5.55 per kilogram, down 30 cents/kg from the previous two weekly auctions and 9 cents/kg below the five-year average, AgriHQ said. The price for 39-micron wool increased 5 cents/kg to $5.55/kg from last week's North Island auction but was down 25 cents/kg from the comparable South Island auction the previous week. The price of 30-micron lamb wool fell 50 cents/kg to $4.95/kg compared with last week and was 11 percent below its five-year average, AgriHQ said.

The New Zealand dollar has strengthened amid global market volatility following the UK's vote to leave the European Union late last week, and the higher local currency makes New Zealand exports less attractive for buyers. Some 62 percent of the 10,874 bales on offer at this week's auction were sold, with most of the passed-in lines containing higher degrees of vegetable matter.

"The strong New Zealand dollar and mixed wool quality generally dampened the prices at this week’s South Island auction," said AgriHQ analyst Shaye Lee. "Returns on strong crossbreds were a mixed bag, with bales with more contaminants reportedly being discounted the most."

The next sale on July 7 includes about 7,300 bales from the North Island.

Wool is New Zealand's 14th largest commodity export, worth $793 million in the year through May.

(BusinessDesk)

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