New Zealand lamb wool prices rose to a six week high on increased demand from China for the apparel fibre.
Lamb wool rose 4.8 percent to $6.60 per kilogram at yesterday’s South Island auction compared with last week’s North Island auction, its highest level since it touched a four year high of $6.65/kg on March 12, according to AgriHQ. The average price for 35-micron wool, a benchmark for crossbred wool used for carpets and accounting for the majority of New Zealand’s production, was unchanged at $5.35/kg.
New Zealand lamb wool prices have been buoyant this year, outpacing demand for other wool types. China is the largest buyer of New Zealand wool, accounting for 52 percent of the nation’s $794 million in wool exports last year, according to Statistics NZ data.
“The lambswool market continues to ride high on what is seemingly strong demand from Chinese buyers,” said Georgia Twomey, a commodity analyst at Rabobank. “The market holding up at these levels is very promising, particularly with the New Zealand dollar at its highest level against the US dollar since January and a weighted currency indicator against all major wool trade currencies at its highest level since September 2014.
“These positive demand signals have been reflected also in the Australian market, which has been rallying strongly since the Easter recess. Gains have been made across the board at auction with strong improvement across merino fleece types as well as consistent strength in the carding and crossbred markets.”
There was good clearance at the latest auction with 92 percent of the 9,265 bales on offer sold at auction yesterday. Some 5,100 bales will be offered at next week’s North Island auction, according to New Zealand Wool Services International.