Export demand for wool has fallen away recently, as rising tension between China and the United States over trade tariffs has prompted Chinese manufacturers to take a cautious approach to their buying requirements. Through late winter and spring, fine, medium and strong wools all underwent reductions in demand, and therefore in price.
Although European and British markets for wool remain solid, the significant price lifts the sector needs depend on the volumes bought by China, which are not happening.
Uncertainty around trade has also impacted the currency, therefore creating another setback for grower returns.
For crossbred wool, prices now mirror the low levels they fell to 12 months ago.
Aside from the trade situation around China, market conditions for fine wool growers are favourable. Demand for its use in active sportswear and outdoor clothing continues to grow, while drought in Australia reduced that country’s national fine wool clip, and therefore overall global market supply.
More positively, a live wool auction held in conjunction with the New Zealand Agricultural Show in Christchurch in mid-November, was well attended by buyers, growers and the public, who witnessed the transaction of more than $7 million worth of wool in four hours.
Wishing our suppliers, customers and other friends a profitable 2019.
Listen to Grant Edwards' January Wool Report on the Country with Jamie Mackay
Grant Edwards, Wool General Manager.