NZ wool prices hit 14-year high

Photo / Thinkstock

New Zealand wool prices surged to a 14-year high amid renewed demand for the fibre in the Middle East and Europe, leading the price of the country's raw materials higher in September, according to the ANZ Commodity Price Index.

The index rose 2.9 per cent to 274 last month, its first gain in four months, and is now within 1 percentage point of its all-time high in May.

That was led by a 12 per cent gain in wool prices, as high prices for competing fibre cotton coincided with a global run-down of wool inventories. Dairy prices rallied 6 per cent in a month when Fonterra Cooperative Group's globalDairyTrade climbed after four straight declines.

That comes ahead of an online auction on Tuesday in the U.S, the first one since Fonterra held its forecast pay-out to farmers at $6.60 a kilogram of milk solids, though some pressures are likely to weigh on prices.

In New Zealand dollar terms, the index gained 1.2 per cent to 204.7, after a 1.5 per cent decline in August.

Other local commodities to increase in value last month were a 4 per cent gain in skins, seafood and butter prices, beef, lamb and aluminium was 3 per cent higher from the previous month, and cheese and casein were up 2 per cent.

Only four commodities tracked fell in value last month, led by an 11 per cent fall in apple prices. Wood pulp prices declined 5 per cent, while sawn timber dropped 4 per cent and log prices decreased 2 per cent.