Fine wool prices are forecast to jump by up to 60% this season.
The record prices are on the back of high prices in Australia for the 18-19 micron range and a supply-demand imbalance.
The New Zealand Merino Company predicts a lift in prices this season of $4 to $5 per kilogram.
Commercial manager Keith Ovens says most of New Zealand's merino clip is sold in Australia and prices there are through the roof.
He says it sets a very high base mark for the new season, which begins in New Zealand in July or August.
Mr Ovens says New Zealand growers are looking at between 30% and 60% more than they sold for last year, depending on the micron bracket.
Prices have climbed and there has been a recent shortage of supply and it is shaping up to be the best season on record for merino wool, he says.
Strong wool prices hold ground
Strong or carpet wool prices are holding their ground after their rapid rise this season.
Wool industry representatives have returned from the biggest annual gathering of wool interests certain that the long term recovery they have been been holding out for is under way.
The annual congress of the International Wool Textile Organisation was held at Hang Zhou in China.
Wool Exporters Council executive manager Nic Nicholson says the mood among growers, traders, processors and retailers was very different to recent years. Order books are active and they are not unhappy with current price levels.
Mr Nicholson says the manufactured goods from higher priced raw materials are only just coming on the market now and the real test will come once it is determined whether there will be any consumer resistance.
However, he says in general, consumer resistance is not expected and there is a very positive mood for the future of wool due to increased demand.
Many are convinced that the new wool promotion initiatives, including the international Campaign for Wool, are beginning to make an impact, he says.