NZ wool auction records lowest clearance rate in almost 8yr

Friday 07 April 2017 10:43 AM

NZ wool auction records lowest clearance rate in almost 8 years amid weak demand

By Tina Morrison

April 7 (BusinessDesk) - New Zealand's wool market remains weak, with the lowest clearance rate in almost eight years recorded at the latest weekly auction.

Only 46 percent of the 11,699 bales offered at auction in the South Island yesterday were sold, the lowest level since June 6, 2009, according to AgriHQ. A large amount of the bales were re-offered lots which had failed to meet seller reserves at previous auctions. Compared with the last South Island sale two weeks ago, the price for 30-micron lamb wool fell 10 cents to $4.10 per kilogram, while 35 and 37 micron crossbred wool fell 25 cents to $3.90/kg, AgriHQ said.

"The low clearance rate was a result of growers’ reluctance to sell at the current market prices," said AgriHQ analyst Sam Laurenson. "Inventory levels will continue to grow around New Zealand with such a low clearance rate which may result in a steady level of bales on offer over the coming months."

New Zealand's wool market has been in the doldrums this season as China, the country's largest export market, sits on high levels of finished inventory while consumer demand shifts away from crossbred wool that comprises most of New Zealand's production. The Ministry for Primary Industries noted in its latest quarterly outlook published this week that wool export prices may remain subdued until inventory is worked through and demand from China returns.

Some 6,600 bales are scheduled to be offered at next week's North Island wool auction.

(BusinessDesk)

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