Chinese demand over-rides stronger dollar

News release – Chinese demand over-rides stronger dollar at South Island wool sale

NZ Wool Services International Ltd reports that continued Chinese interest at today’s auction of South Island wool in Christchurch stimulated prices in specific categories, overcoming an unhelpful exchange rate.

Since the previous sale on 7 May the weighted wool currency indicator strengthened by 1.3 per cent, which negatively impacted on some carpet wool categories.

Of almost 17,000 bales on offer today, 80 per cent sold.

According to New Zealand Wool Services International, a small offering of mid micron fleece was strongly contested, increasing in price between four and eight per cent compared to the last time offered, on 30 April.

Compared to last week’s sale of North Island wool, prices for 32 to 34 micron crossbred fleece rose by up to 2.5 per cent. Coarser types however dropped in price by as much as three per cent. The shorter categories ranged from firm to three per cent dearer.

Full-length coarse carpet fleece comprised 25 per cent of today’s sale. The larger percentage of this offering eased between one and four per cent, compounded by previously unsold volumes being placed back onto the market

A small volume of coarser early shorn and second shears resisted this trend, strengthening between two and four per cent.

First lambs’ fleece continues to be in demand, gaining generally three to five per cent, with prices strengthening further as the sale progressed Prices for oddments rose by one per cent.

Most significant buyer interest at today’s sale was from China, Australasia, India and the Middle East. Support from Europe and the UK was limited.

Next week’s New Zealand wool auction will be held in Napier on Thursday 21 May comprising approximately 10,000 bales of North 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

Attached table

Please find attached tables covering indicators and prices for key wool types from this week's sale.

sale_14.05.09.xls

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