Demand for wool running ahead of supply - 28 January 2010

New Zealand Wool Services International Ltd reports that prices at today’s wool sales generally rose across the board on the back of strong demand and a favourable currency factor. 

Compared to the previous sale, on 21 January, the New Zealand dollar was down in value by 1.75 per cent against a weighted indicator of the main international wool trading currencies, and has now fallen 3.88 per cent since the previous week’s wool sale.

While the softening dollar helped prices in the local market gains, most wool types also rose in value in addition to the currency movement, driven by increased demand and lower projected future wool volumes. 

In the combined auction of 25,000 bales of North and South Island wool in Napier and Christchurch, 94 per cent of the wool on offer sold, with South Island price levels generally edging above comparative types in the North Island.

According to New Zealand Wool Services International, compared to the last time offered, on 14 January mid micron wools increased between two and five per cent.  

Fine crossbred fleece and shears, last sold on 21 January were firm to three per cent dearer today, while coarse crossbred fleece and second shears are four to seven per cent stronger.

First lambs wools ranged from 3.5 to five per cent dearer with lamb oddments up 2.5 to four per cent. Combing oddments finished five to seven per cent up on last week, while the shorter oddments rose by between 2.5 to 5.5 per cent.

Competition at today’s sales was well spread across various markets, with Chinese interests continuing to dominate the finer types, particularly lambs’ wool. Coarser wool types received most attention from Australasian carpet mills, China, India and the Middle East, with support from Western Europe and the United Kingdom. 

Next week’s auction, on 4 February, will be a combined sale of North and South Island wool, in Napier and Christchurch, offering approximately 6,800 bales and 6,000 bales respectively.

New Zealand Wool Services International publishes a detailed weekly report on New Zealand wool auction trends. A summary of this can be viewed at http://www.nzwsi.co.nz. The full report is available by negotiation with the company.