New Zealand crossbred wool, which accounts for the majority of the country's production, rose to a three-and-a-half month high this week on lower volumes.
The price for 35-micron clean wool, commonly used for carpets, advanced 3.9 percent to $5.35 per kilogram, the highest level since Nov. 20, according to AgriHQ. The wool type only sold in the South Island this week, with the lower supply bolstering the price as other strong wool types declined in auctions across both islands.
Some 21,228 bales were offered for sale at the combined auctions across the North and South islands, the second-largest volume this year, as New Zealand comes out of its main shearing season from December to early February, which accounts for about 60 percent of the annual crossbred wool clip.
"There was relatively strong competition at the auctions, and some targeted buying which caused a bit of variation between wool types and between islands," said AgriHQ agriculture analyst Ivan Luketina. "There are still high volumes of wool coming to auction despite the dry weather, which can often delay shearing."
The price for lamb wool held steady at $6.40/kg after it last month reached $6.55/kg, its highest level in almost four years. Lamb wool is typically used for apparel.
"The high lamb wool prices have meant that lamb wool volumes at auctions have been reasonably high, and it has probably contributed to having more lambs shorn before going to the works," said AgriHQ's Luketina. "During January and February lamb wool has made up about a third of the volume on offer, a nearly 18 percent increase on the total volume of lamb wool offered in this period of 2014."
Demand is also high for mid-micron wool in Australia, with reports suggesting Chinese buyers are driving up prices for apparel wool types, Luketina said.
"This is a good signal that demand is not being satisfied for these wool types, that have similar end uses, across both major supplying markets."