20 Apr 2012

Wool market oversupplied, says biggest exporter

7:00 am on 20 April 2012

The country's biggest wool exporter is encouraging sheep farmers to hold onto their wool to help reduce market oversupply.

Wool Services International (WSL) says prices at this week's sale fell for the fourth consecutive week and only 55% of the 10,000 bales presented were sold.

General manager John Dawson says demand has dropped because of global economic worries and unsold wool has built up.

He says there is an unseasonably large amount of wool on the market at the moment and WSL is telling brokers and merchants to even out the flow of what is left to allow the market to stabilise.

Mr Dawson says he believes that once that happens, buyers will get back into the market.

Fine crossbred shears and coarse fleece and shears fell by up to 5% at this week's sale, while second lamb's wool eased by 3%. Fine lamb's fleece bucked the trend, firming by 3%.

Next week's sale of South Island wool will comprise 14,000 bales.