Wool prices firm but farmers hope for higher prices in future

Rachel Shearer, General Manager, PGG Wrightson
photo: PGG Wrightson

A review of the latest wool season shows that wool prices are stable, with some types of wool close to their highest levels in three years – however, wool prices still need to rise significantly for farmers to reap the rewards.

PGG Wrightson wool general manager Rachel Shearer reviewed the season following the final sale at the end of last month.

“It’s gratifying to see the season come to a successful conclusion. We can see that the market is stable compared to the past few years, but there is still a lot of room for growth.”

“In terms of pricing, we’ve been getting prices higher than we’ve seen over the last two years, particularly for the tougher wools, with some wools actually getting close to their highest levels in three years.”

She said mid-micron wools were encountering a more challenging market, necessitating brokers on the sale floor to take a firm stance and protect their clients’ wool from bargain hunters.

Mr Shearer said a large supply of older wool was attracting buyers as a result of the refurbishment and return to full production of the Awatoto North Island wool mill.

“There is very little old wool left, which is a positive sign for the start of the new season as supply won’t be affected by old stock hanging around.”

When it comes to buyers, Shearer said demand from China remained subdued but that was helped to offset by increased buying from India.

“We’re also seeing some demand from Europe, from the cruise industry – they’re buying wool carpets for the new ships they’re building.

“There has been a bit of a boom in new cruise ship construction post-Covid, which is good news for us, but the fashion market in Europe is down – people are being more budget-conscious, so these companies are not buying as much wool.”

Mr Shearer said the industry would not be given much of a break as the new season begins with the first auction next Thursday.

“As demand consolidates as the 2024/25 season gets underway, we can expect returns to gradually improve, with the quality of New Zealand clippings giving this country’s growers the best advantage compared to most other producers.”