South Island wool sale bucks trend as 90 per cent finds buyers

Lamb's wool as well as well grown and well prepared new season wool were popular with buyers. Photo / Stephen Jaquiery.

Buyers found renewed vigour at this week's South Island wool sale, especially for lamb's wool and well-grown, well-prepared new season wool.

After a period of uncertainty on global markets in recent weeks and reports of high stock levels throughout the wool pipeline, the latest sale bucked that trend, PGG Wrightson Wool's South Island sales team said.

A total of 90 per cent of the 8000-bale offering was cleared. The limited offering of mid-micron and merino also found solid support from a full gallery of buyers.

Wool prices remain historically low but have increased in the past year, partly because of rising fine and mid-micron wool prices.

Wool exports were forecast to increase slightly to $570 million, a 5 per cent rise for the year to the end of this month, the Ministry for Primary Industries' latest Situation and Outlook report said.

That increase in export revenue was because of higher fine and mid-micron wool prices, it said.

Strong-wool prices had remained low for several years and were virtually unchanged from the last year.

Positive consumer sentiment towards the sustainability of natural fibres was yet to drive a recovery in the strong-wool industry.

However, there were some indications that large manufacturers were starting to notice that shift in consumer preferences, the report said.

For example, furniture maker Ikea recently announced that, from 2025, all of its wool would be sourced sustainably.

If that was any indication of future trends, then there could be opportunities for strong wool prices to rise.

Competition from other natural fibres, such as cotton, and cheaper synthetic fibres remained a barrier for a sustained rise in strong-wool prices.

Unlike strong wool, fine wool continued to perform well but only made up a small proportion - less than 10 per cent - of New Zealand's total wool export volumes.

Because of comparatively high prices received for fine wool, those exports represented nearly 30 per cent of wool export revenue.

The current high price for fine wool was partially because of lower wool production in Australia, where merinos were the main breed, it said.

A range of prices from the South Island:

Cross Bros Ltd (Balclutha), 30 bales Romney early shorn AA, 36.7 micron, 82.9 per cent yield, 306 greasy, 369 clean; JH Tombs (Middlemarch), 23 bales Corriedale AA, 29 micron, 71.7 per cent yield, 700 greasy, 976 clean; The Gorge Pastoral Ltd (Oturehua), one bale merino AAAA, 16.4 micron, 70.5 per cent yield, 1750 greasy, 2482 clean.