27 Aug 2015

Wool sector sees good times ahead

9:00 am on 27 August 2015

A wool industry leader says there is plenty to be optimistic about in that sector, despite the economic slow down in the biggest market China.

Howie Gardner, a South Otago sheep farmer, is the new chairman of the Elders Primary Wool company, which from next week, becomes CP Wool, following the Carr Group's acquisition of the Elders New Zealand business last year.

He said in contrast to the current dairy doldrums and less than flash sheep meat prices, wool was providing solid returns for farmers.

"Wool returns currently are breaking all sorts of records. Fine hogget wool, for example, clipping $9 or more clean. So that's lambs' wool, anything at that softer end, the lower micron, is particularly sought after, but even ewes wool - some of the pre-lamb shear results have been pretty substantial.

"And it's actually on the back of a sustained period of stability, which we haven't seen for some time, so with a significant rise four years ago, followed by a bit of a dip and with what we're seeing at the moment, you would have to have some confidence in the future of the industry."

He said everyone was nervous about the economic outlook in China, but wool may not be as exposed to the impact of that as other commodities.

"Where the wool industry differs is that when you talk about logs, milk powder, sheep meat, a whole lot of other commodities, there are huge volumes sitting in storage.

"With wool, there is nothing, the pipeline is empty.

"So that does suggest that with the supply side of the equation being what it is, it can't be manipulated by living off stocks, because the stocks aren't there."

Mr Gardner said Elders Primary Wool's "Just Shorn" carpet wool brand would be introduced to New Zealand soon, following its successful launch in the United States and Australia.

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