Wool prices jump at South Island sale

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Prices for all wool breeds increased at this week's South Island wool sale, which was held live as part of the Canterbury A&P Show in Christchurch.

Crossbred wool lifted significantly, with the better styles being most affected. Further interest was shown for a high class merino offering that attracted prices not seen in a generation, PGG Wrightson Wool's South Island sales team said.

Compared to the previous sale, crossbred fleece (31 to 34 micron) was 7%-10% dearer with a few choice lots up to 14% dearer.

Crossbred fleece (35 micron and stronger) were up 7%-11%. Crossbred second-shear were 2%-4% up on a limited offering, while crossbred oddments were 3%-4% dearer.

Rabobank's latest agribusiness monthly report said the "two-speed" wool market had continued through the last month as merino wool remained in high demand.

The Australian Eastern Market Indicator pushed through its August record high, reaching A1623c/kg clean.

Fine wool prices in New Zealand had also been performing well. The value of fine wool exports was up 18% year on year per tonne of wool exported for July-September.

Retail giant VF Corporation, whose brand portfolio included The North Face, Smartwool, Lee and Wrangler, had signed a definitive agreement to purchase New Zealand's Icebreaker brand. That provided a platform for growth for the brand which would flow through to its merino sourcing requirements, the report said.

The coarse crossbred indicator had continued to hover close to NZ300c/kg through October. Clearance rates at auction averaged 76% for the month, down from 79% in September. Compared with last season, there had still been a much needed lift in bales sold, up 34%.

The weaker New Zealand dollar against the US dollar, falling to a low of US68c in late October, did help to support prices. Should that level below US70c be maintained, it would remain a positive influence for the market.

"Broker reports indicate that selective buying at auctions with better quality wool types is attracting the most interest and better prices. Selective buying is expected to continue as wool supply continues to outstrip demand," the report said.

A range of prices from the South Island wool sale. - Glenrene Holdings (Outram), 10 bales fine Perendale hogget AA, 30.6 micron, 77.3% yield, 429 greasy, 555 clean; Greer Farm Partnership (Ranfurly), 12 bales crossbred hogget AA, 32 micron, 78.3% yield, 380 greasy, 485 clean; Hawkdun Pastoral Ltd (Oturehua), 58 bales crossbred hogget AA, 30.9 micron, 74.1% yield, 409 greasy, 552 clean; Hummock Run Ltd (Waikouaiti), eight bales halfbred hogget AA, 24 micron, 79.2% yield, 1099 greasy, 1388 clean; Highland Farming Co Ltd (Lawrence), 24 bales Perendale hogget AA, 31.2 micron, 74.4% yield, 388 greasy, 522 clean; Rocky Ridge Farm Ltd (Oturehua), three bales fine quarterbred hogget AA, 18.4 micron, 78.1% yield, 1899 greasy, 2431 clean; Lindis Downs (Tarras), three bales merino hogget 5A, 15.8 micron, 73.1% yield, 2150 greasy, 2941 clean; Mount Campbell Station Ltd (Alexandra), one bale extra fine merino hogget 4A, 16.4 micron, 69.2% yield, 2050 greasy, 2962 clean; The Gorge Pastoral Ltd (Oturehua), three bales fine merino hogget 4A, 15 micron, 69.2% yield, 2070 greasy, 2991 clean; Mount St Bathans Co Ltd (Oturehua), five bales fine merino 5A, 17.1 micron, 73.8% yield, 2100 greasy, 2846 clean; Rocky Ridge Farm Ltd, three bales fine merino AAA, 16 micron, 75.6% yield, 2275 greasy, 3009 clean; J K McArthur (Clyde), three bales extra fine merino 4A, 16.1 micron, 73.6% yield, 2190 greasy, 2976 clean.