For growers of all wool types, there are forces at play outside their control with factors that influence global trade offering little encouragement. Global financial uncertainty, and in particular the trade dispute between the United States and China, is having a negative effect on the market. These forces have a direct bearing on wool price, with immediate impact. We continue to monitor them closely to understand future pricing trends.
Demand for crossbred fibre was steady through the winter and into the early spring. However, although wool is moving through the auction pipeline and beyond, prices remain historically low.
Good to best quality styles for all wool types, with high preparation standards, have been well rewarded.
Growers presenting well-prepared pre-lamb full fleece wool are receiving significant premiums, benefiting in the vicinity of 50 to 60 cents per kilogram clean. Slightly lower premiums, of 20 cents clean,are there for quality offerings in the second shear market.
Some hogget wool is starting to come to the market, with the finer edge offerings met by steady demand. Adult crossbred wool is undergoing a supply lull. This supply will increase throughout November with shearing lambs at foot and post weaning shearing taking place especially in the North Island at this time.
New Zealand fine wool is rarely offered for sale during the winter, when we instead rely on the Australian market for pricing signals. After values remained steady through June and July, following three weeks with no auctions, prices for Australian fine wool fell substantially in August. Fortunately for our growers, just prior to the first significant offering of New Zealand fine wool in early September, the Australian market saw a major bounce back, which was reflected in our sale, resulting in fine wool prices well up on expectations on the day. Values whilst strong compared to historical levels are however back $5-$7 / Kg on the peak of last season.
A number of growers, especially for fine wools, have elected to take forward contracts, giving them ‘locked in prices’ which are therefore not subject to current market fluctuations due to world financial uncertainty.
Regardless of how grower wool is marketed, high preparation standards is key to maximising returns. Higher levels of vegetable matter content are noticeable this season compared to last, and extra vigilance is therefore necessary in the woolshed.
PGG Wrightson Wool, General Manager