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Wool prices firm at NZ weekly auction

Wool prices firm at NZ weekly auction, offering 'glimmer of hope'

By Tina Morrison

July 28 (BusinessDesk) - Prices firmed at New Zealand's latest weekly wool auction offering a "glimmer of hope" amid current weak market conditions.

At yesterday's South Island sale, longer 37-micron crossbred second-shear wool increased 40 cents to $3.15 a kilogram compared to last week's North Island sale, while mid-length fibre gained 25 cents to $2.70/kg and shorter styles were firm at $2.40, according to AgriHQ. Meanwhile, 31-micron lamb wool was also up week on week by 80 cents to $3.70/kg.

Compared with the last South Island sale two weeks ago, 37-micron crossbred fleece was up 5 cents to $3/kg. Meanwhile the improvements in the second shear were not as large due to the premium that is typical for the South Island. The longer 37-micron second shear was up 5 cents to $3.15/kg while the shorter style was firm at $2.40/kg, AgriHQ said.

New Zealand has just come out of its worst wool season since the global financial crisis as China, the largest buyer of the fibre, switched its preference to fine wool and away from strong wool that makes up the majority of the country's clip. AgriHQ described the clearance rate at yesterday's auction as "strong", with 73 percent of the 6,452 bales sold.

"Prices were generally firm to up on last week’s sale - this is likely to be due to the wider range of wool styles on offer," said AgriHQ analyst Sam Laurenson. "The lift in prices and higher exchange rate is a small glimmer of hope in the current weak market conditions."

The latest trade data released by Statistics New Zealand this week showed exports of wool slumped 31 percent to $523 million in the year ended June 30. That pushed wool down the export commodity rankings to 19th place, from 15th place the previous year.

(BusinessDesk)

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