Wool prices down as supply exceeds demand

New Zealand Wool Services International Ltd reports that continuing supply and demand factors were to the fore at today’s wool sale.

Of the 9,600 bales on offer at the combined auction of North and South Island wool, 74 per cent sold.

According to New Zealand Wool Services International general manager John Dawson, light demand and heavier than normal supply had a negative impact on prices today.

“Much larger than normal quantities of wool are being offered through the auction system at the moment, at a time of the year that is traditionally quiet. As buyers from Western Europe and the United Kingdom take their annual holidays during this period, interest from them is limited. This has neutralised today’s weaker New Zealand dollar. Since the most recent sale on 28 July, the New Zealand dollar has fallen by 0.85 per cent against the weighted indicator for the main wool trading currencies, although that currency change had little impact on today’s sales.

“Since last week’s sales, mid micron wools of 26.5 to 27.5 micron dropped in price by one per cent, while 28 micron wools were more highly sought after, lifting by 2.5 per cent. Meanwhile 29 and 30 micron wools were 2.5 per cent cheaper today.

“Fine crossbred early shorn and second shear 3/5 inch were buyers’ favour and 3/4 inch one per cent cheaper. Coarse crossbred fleece and second shear were up to one to 1.5 per cent cheaper, with an exception being 2/3 inch wools, which were 3.5 per cent cheaper. Good colour combing wools were two per cent dearer.

“Compared to the North Island sale on 28 July, fine crossbred early shorn and second shear types were 1.5 to three per cent cheaper. Coarse crossbred early shorn and second shears B minus 3/5 inch rose by 2.5 per cent. Good colour 3/4 inch wools were buyers’ favour and 2/4 and 2/3 inch types dropped in price by two to three per cent,” he said.

Australasia provided most competition at today’s sale, while interest from India, China, Western Europe and the United Kingdom was limited.

Scheduled at next week’s sale, on 11 August, are approximately 2,000 bales from the North Island and 7,200 bales of South Island wool.

New Zealand Wool Services International publishes a detailed weekly report on New Zealand wool auction trends. A summary of this can be viewed at http://www.nzwsi.co.nz. The full report is available by negotiation with the company.

ENDS

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