NZ crossbred wool falls to two-month low amid stronger currency, weaker demand
New Zealand crossbred wool, which accounts for the majority of New Zealand's production, fell to a two-month low at the South Island auction yesterday amid a stronger local currency and weaker buyer demand.
The price for clean 35-micron wool, a benchmark for crossbred wool commonly used for carpets, dropped 3.8 percent to $5.05 per kilogram from the previous week's auctions in both islands, according to AgriHQ. That's the lowest price since Jan. 22, when it sold for $4.85/kg.
New Zealand's wool market is less competitive when the local currency rises. The New Zealand dollar touched a two-month high against the greenback this week and set new records against the Aussie and the euro. Weaker demand also weighed on the price.
"The dollar moved against exporters during the week, which took some of the value out of the auctions," said AgriHQ agriculture analyst Ivan Luketina. "It's also reported that many of the buyers are covered for their short-term shipping requirements, which takes some pressure off prices."
The price for clean lamb wool slipped 0.8 percent to $6.45/kg.
Some 9670 bales were sold at the latest auction.
New Zealand wool exports jumped 36 percent to $70 million in February, compared with the year earlier month, making it the nation's 12th largest commodity export, according to Statistics New Zealand trade data released this week. In the year ended February, wool exports rose 13 percent to $772 million, ranking it as the 14th largest commodity export, according to the data.