NZ crossbred wool prices fall to 7-year low
NZ crossbred wool prices fall to 7-year low amid lacklustre
demand
By Tina Morrison
June 30 (BusinessDesk) -
Prices for some crossbred wool grades fell to their lowest
level in more than seven years at New Zealand's latest
weekly auction as unsold stockpiles weigh on the market amid
lacklustre demand from China, the largest buyer of the
fibre.
At the latest South Island auction yesterday,
35-micron crossbred fleece wool dropped 5 cents to $3.30 a
kilogram from the previous South Island sale a fortnight
ago, which is the last time the fibre traded at auction,
according to AgriHQ. Coarser 37-micron crossbred fleece wool
dropped 20 cents to $3.10/kg from the previous South Island
sale and was 15 cents down from last week's North Island
sale, according to AgriHQ, which noted prices for both wool
types were now at their lowest level since January
2010.
AgriHQ's lamb wool indicator dropped 4 cents to
$3.94/kg from last week while the coarse crossbred indicator
dropped 5 cents to $3.40/kg.
New Zealand is the world's
largest exporter of crossbred wool and weak demand for the
fibre, which makes up about 80 percent of the national clip,
has weighed on prices this season, prompting farmers to
stockpile bales in hopes the market will pick up. The
Ministry for Primary Industries noted in its latest
quarterly outlook that the overhang of inventory will make
it difficult for prices to rise quickly.
"There was no
improvement in the wool market at this week’s South Island
sale," said AgriHQ analyst Sam Laurenson. "Wool continues to
be stockpiled around the country by farmers and merchants
alike in hopes for an improvement in the market. This in
itself is of concern for future prices, as it could force
prices lower once released."
AgriHQ's Laurenson noted
that weak demand and a stronger local currency had weighed
on prices and the clearance rate at the latest
auction.
Of the 8,194 bales on offer only 5,716 were
sold, with the 70 percent clearance rate below both this
season-to-date clearance of 74 percent and last season's
clearance to date of 88 percent.
Next week’s North
Island sale is expected to have 9,800 bales on offer, which
is 46 percent above the average number of bales offered each
week in July last year as some stockpiles are released to
the market, Laurenson said.
The value of New Zealand's
wool exports has dropped by a third to $531 million in the
12 months to the end of May, according to the latest trade
data released by Statistics New Zealand this week. For the
month of May, exports were down 40 percent to $35 million
compared with $58 million in May last
year.
(BusinessDesk)