NZ lamb wool price rises to record amid strong demand, limited supply
By Tina Morrison
June 5 (BusinessDesk) - New Zealand lamb wool prices jumped to a record high amid strong demand from exporters and limited supplies.
Lamb wool climbed to $7.45 per kilogram at yesterday's South Island auction, from $7/kg at last week's North Island auction, the highest price that AgriHQ has recorded since it began collecting wool prices in July 2005. The price for clean 35-micron wool, a benchmark for crossbred wool used for carpets and accounting for the majority of New Zealand's production, held at $6.20/kg for a third week, its highest level since November 2013 and 17 percent above year earlier levels.
Some 6,876 bales were offered at auction yesterday, down from 8,907 bales last week. While volumes are expected to increase to 9,100 bales at next week's North Island auction, the following week's scheduled South Island auction has been cancelled due to insufficient wool. Demand remained strong at this week's auction, with 94 percent of the wool offered at auction sold yesterday, the ninth straight week the auction clearance rate has held above 90 percent.
"It is anticipated that early winter shearing will cause some increases in volumes in the short term," said AgriHQ analyst Emma Dent. "Should volumes increase it is expected that prices will experience some decreases. However it is uncertain at this time how volumes and prices will hold over winter."
New Zealand is heading for its smallest annual wool clip in six years, reflecting the lowest sheep flock in more than 70 years, dry conditions and an increased focus on meat producing breeds of sheep, according to analysts. A weaker New Zealand dollar is also making the nation's wool more competitive, with the kiwi currency down about 1.3 percent against the US dollar since the last auction.
The value of wool exports increased 15 percent to $796 million in the year through April, making it New Zealand's 13th biggest commodity export, according to data released last week by Statistics New Zealand.