Thursday, May 19, 2022

Strong wool shows some life

Crossbred wool is showing a little more spring in the market with stronger buying power finding buyers eager to get their hands on supplies.  

Prices over recent sales have lifted in line with a marked improvement in the quality of wool offered.

Values have firmed and remain steady around the $3 mark for good quality fleece, a welcome change from the poorer coloured and contaminated fleeces seen as a result of climatic conditions and nutrition levels throughout the summer.

PGG Wrightson Wool procurement manager Rob Cochrane says the market improvement is generally driven by the exchange rate, with the same trend showing out in Australia.

He says the spring in the price is more about the sheep numbers and volume of wool available than in any real excitement for an about-turn in the strong wool industry.

“The crossbred market has continued to meander along its quiet pathway and while prices in general have not improved greatly over the past couple of months, wool exporters should be congratulated for their ability to support most types offered for sale which has enabled reasonable clearances to at least maintain a flat price,” Cochrane said.

Production is lower with the stockpiles of wool that had banked up in both NZ and Australia over the covid period now moved, leaving the market for all grades of wool in a slightly improved position.

“Last season’s wool clip that farmers hung onto to has now cleared and we are back to a hand to mouth situation in which the market is now largely driven by the exchange rate.

“While crossbred woolgrowers will not see that as assisting their financial woes around total wool production, harvesting, transport and selling costs, at least a huge stockpile of unsold wool has not been created.”

China’s demand for wool has eased right back after the most recent lockdowns, softening the Chinese market further from the lesser quality NZ wool that was offered up earlier in the season.

“While crossbred woolgrowers will not see that as assisting their financial woes at least a huge stockpile of unsold wool has not been created.”

Rob Cochrane
PGG Wrightson Wool

Wool showing higher contamination percentages together with a poorer visual assessment than usual have caused market hesitation as there’s very limited interest from the Chinese mills that have traditionally purchased and processed these types.

But Cochrane says the good news story is that better coloured and quality crossbred wools have received solid support from the wool trade in recent weeks with specific interest in second-shear types displaying good characteristics.

Large quantities of crossbred lambs’ wool also continued to come into the market during March and April with the best interest from exporters also shown towards those with similarly good colour and low Y minus Z measurement characteristics.

Cochrane says many lambs’ wool lines offered for sale displayed coarser micron readings compared with earlier due to their longer staple length as shearing of some of these types was delayed because of shearer shortages.

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