While we once again note that crossbred prices are unsustainable at present levels, longer term positives for the wool market are consistent and growing: the fundamentals of the sustainable, biodegradable fibre that we produce have not changed, and the world wants these characteristics ever more adamantly. We believe the rational grounds for optimism around wool are as strong as they have always been.

We have seen increased demand for all wool types from our most recent North and South Island sales in early February, with prices increasing around 15-20c/kg clean accordingly.

Increased China demand has recently assisted crossbred growers: notably in past years China has been the market leader.

Demand for our wool from China is gradually rebuilding. In the middle of last year the proportion of New Zealand wool exported to our largest market was between 20 and 25 per cent of the national clip. More recently that has increased to 30 per cent.

Recently China’s has eased its covid protocols shifting away from its previous elimination strategy driving this increase in demand.

We have also noted the value of Australian fine wool responding immediately and positively to the lifting of these sanctions, providing encouragement for New Zealand fine wool growers as and when their market recommences later in the year. 

For growers and exporters alike however, the current challenge is the quality of wool coming forward for sale. Climatic conditions that increase the propensity to colour wool have prevailed: hot and humid weather across large parts of the country, certainly in the north, mean the proportion of the clip presented at wool stores that is coloured to a significant degree is the worst seen for many years.

While this effect is almost entirely beyond their control, if growers can do their best to remove yellow skirts and points from mainline fleeces to improve the overall colour, then the value of their wool will improve.

Grant Edwards, General Manager, PGG Wrightson Wool