Kiwi dollar’s strength pushing wool prices down

New Zealand Wool Services International Ltd reports the record high New Zealand dollar took a toll on prices at today’s wool sale.

Of the 17,000 bales on offer at the combined auction of North and South Island wool, 62 per cent sold.

According to New Zealand Wool Services International general manager John Dawson, the continuing strength of New Zealand’s currency has again forced wool prices lower.

“Since the most recent sale on 21 July the New Zealand dollar has risen by 1.4 per cent against the weighted indicator for the main wool trading currencies, and is at record highs against the United States dollar.

“On top of the currency effect, the very high volumes of wool on offer over the European summer holiday season is putting pressure on price levels, as demand is restricted. Traditionally this is a quiet time of the season As a consequence, the passing rate remained high today.

“For South Island wools since the 21 July sale, for the mid micron types in the 25 to 29 micron range, prices eased today by three per cent. Fine and coarse crossbred fleece declined by 3.5 per cent with early shorn 3/5 inch dropping by five per cent. Shorter 3Ž4 inch wools dropped in price by 1.5 to two per cent while 2/4 inch wools were down by 3.5 to four per cent.

“In contrast, crossbred oddments in the South Island represented the positive side of this market. They were well sought after by buyers and showed an upward trend, rising in price by 1.5 per cent. Crossbred lambs’ wools were nominally down by 1.5 per cent.

“Meanwhile, in the North Island since 21 July coarse crossbred second shear 3Ž4 inch wool eased by 1.5 to two per cent, 2/4 inch by 3.5 per cent and 2/3 inch by fully 2.5 per cent.

“Fine crossbred fleeces were between 3.5 and five per cent cheaper, with the shears ranging from firm to three per cent easier.

“A nominal offering of first lambs’ types were up to 2.5 per cent easier. Long oddments were firm to four per cent cheaper with short types ranging from firm to five per cent easier,” he said.

Competition at today’s sale was limited, with Australasia, China and India taking the principal roles, while buyers from Western Europe and the United Kingdom acted in support.

Scheduled at next week’s sale, on 4 August, are approximately 10,800 bales from the North Island and 7,000 bales of South Island wool.

New Zealand Wool Services International publishes a detailed weekly report on New Zealand wool auction trends. A summary of this can be viewed at http://www.nzwsi.co.nz. The full report is available by negotiation with the company.

ENDS

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