1 Oct 2011

Mixed result for wool

6:13 am on 1 October 2011

A lower New Zealand dollar and good demand from China and Europe lifted cross-bred wool prices at this week's South Island sale.

Cross-bred fleece and early shorn and second shear wools made up most of the more than 14,500 bales on offer.

Prices lifted by 2.5 to 5%.

The exporter, Wool Services Interantional says the price lift matches the exchange rate shift between the New Zealand and US dollars since the last sale.

But the more favourable exchange rate was no help to fine wool prices.

Prices for the 800 or so bales of merino wool on offer, fell by between 5% and 20% on the last sale of fine wool a fortnight ago.

Fine mid-micron wool prices also eased.

The New Zealand Merino company which sells most of New Zealand's fine wool clip, says prices have been sliding as demand drops in recession-hit markets.

But marketing manager Keith Ovens says they have been at record levels and are still 20% higher than they were a year ago.

He says most of the New Zealand Merino company's suppliers are protected from the current slide because they locked in prices when they were at their peak in contracts on more than 50% of the wool clip.