Friday 28 April 2017 10:31 AM
NZ wool auction volumes remain high as farmers seek to move stockpiles
By Tina Morrison
April 28 (BusinessDesk) - Volumes at New Zealand's weekly wool auction were higher than normal for this time of year as farmers try to shift bales they held back from previous auctions due to weak prices.
Some 6,160 bales were offered at yesterday's North Island auction yesterday, 13 percent higher than volumes for the same time last year, according to AgriHQ. Some 70 percent of the wool was sold at auction, lagging behind the 75 percent clearance rate for the season to date, and well below last year's 90 percent rate, AgriHQ said.
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 that wool export prices may remain subdued until inventory is worked through and demand from China returns.
"Wool volumes currently being offered remains relatively high for this time of the year," said AgriHQ analyst Sam Laurenson. "This is due to lower volumes seen towards the beginning of the year as farmers stockpiled wool in hopes for the market to pick up. These stockpiles will slowly make their way into the market in the future."
Compared to the last North Island sale two weeks ago, prices for 35 and 37 micron strong crossbred wool were unchanged at $3.85 per kilogram and $3.80/kg respectively, AgriHQ said. Meanwhile 30-micron lamb wool fell 15 cents/kg to $3.50/kg, while 37-micron second-shear crossbred wool dropped 15 cents to $3.65/kg.
Compared with last week's South Island sale, strong crossbred wool advanced 5 cents/kg, while lamb wool fell 20 cents/kg.
An estimated 7,600 bales are scheduled to be offered at next week's South Island wool auction.