NZ wool prices slip at auction as buyers shun plant contamination

Friday 15th April 2016

New Zealand wool prices slipped at auction this week as buyers mark down poorer quality fibre with excessive vegetable matter.

Strong wool of 39 microns dipped to $5.65 per kilogram at yesterday's North Island auction, from $5.75/kg at last week's South Island auction, according to AgriHQ. Strong wool, which makes up the majority of New Zealand's production, is trading about 14 percent higher than at the same time last year.

Lamb wool of 30 microns fell to $6.20/kg from $6.40/kg last week, and is 10 cents/kg below the year earlier price, AgriHQ said.

Poorer quality wools that are discoloured and include higher amounts of vegetable matter are now coming through the auction system, pushing down prices. Following a period of dry drought-like conditions, there is typically a surge in the growth of weeds and plants pumping up seed heads to try and survive, which get caught in sheep wool as stock push into rougher country containing more trees, bushes and grass seeds, according to New Zealand Wool Services International. That's particularly an issue for lamb wool because processing machinery for the fibre can only cope with a very small amount of vegetable matter.

While the latest auction attracted strong buying competition for wool types that matched buyers' contract specifications, there was a spread in prices within the same wool types because of quality issues, with those contaminated with vegetable matter and seed content trading at a discount, said AgriHQ analyst Shaye Lee. Prices were generally down across the board, she said.

Just 5,456 bales of wool were offered at auction this week with 85 percent sold under the hammer. That compares with 9,400 bales offered at auction last week with a 91.6 percent clearance rate.

BusinessDesk.co.nz

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