Low prices keep wool in storage

Farmers are storing cross-bred wool in response to auction prices reaching a 23-year low.

Wool Partners International chief executive Iain Abercrombie said the volume of wool coming forward for sale was 22 per cent lower than at the same time last year, a trend he largely attributed to farmers storing it in expectation prices would improve.

Abercrombie said a year ago wool prices were at a 12-year high but the credit crunch had seen manufacturers go out of business and demand dry up.

But there were signs demand was picking up and manufacturers were inquiring about supply.

Lee Stream farmer Owen Diack has stored his 117-bale main shear on his farm since the middle of June, saying he was not prepared to sell on a falling market and he wanted to control when it was sold.

"It's too good a product to dump."

The wool was valued this year at between $2.40 and $2.70 a kg. Diack said when he bought his farm in 1981 his wool was then valued at $2.30 a kg.

He hoped that by retaining his clip until the bulk of pre-lamb wool had been sold, supply and demand could force prices higher.

Federated Farmers meat and fibre chairman Bruce Wills said he had 30 bales unsold and knew of many farmers who had wool in their sheds.

His wool had been acquired since February and he hoped to sell it before his main shear in December.

"It is rare for me to have that amount of wool unsold, but I know I would get so little for it."

Meat and Wool New Zealand statistics show wool exports in the year to July were 15 per cent down on the same period a year earlier, but down 9.6 per cent on a month-to-month comparison.

- OTAGO DAILY TIMES