Prices improve at early season sales

Good quality and stronger prices have marked recent wool sales, Tony Leggett reports.

In Business4 Minutes

Auction prices for strong wool have improved in the past few sales as buyers chase limited supplies to cover their forward orders.

PGG Wrightson Wool’s newly appointed North Island sales manager Steve Fussell says the quality of most of the wool coming through the auction system has been excellent in spite of the challenging winter growing conditions.

“It is yielding well, a lot between 84-86%, and the colour is exceptional too for most of the lines we’ve sold in the recent sales,” he says.

“One noticeable trend has been the increase in micron for some of the second-shear wools. Some have gone over 41 microns after a very good growing period for ewes,” he says.

These wools have still attracted good support from buyers, and there has been good demand for the finer hogget wools in the 33-34 micron range.

At the North Island wool sale on September 7, Fussell says bidding fell just two cents short of $3/kg greasy for one lot of well-presented wool from a Gisborne property.

“Preparation still matters even at today’s prices. That was an exceptional line of wool and the buyers were chasing it.”

Fussell says two of his regular crossbred

grower clients who sold wool in recent sales said they had turned a profit from wool, after deducting their direct costs, for the first time in many years.

“That’s great to hear because it’s been so long since we’ve heard profit mentioned by strong wool growers.”

The North Island strong wool indicator lifted 27c/kg clean at the September 7 sale and the clearance of farmer lots was 100%, a rare statistic in what has been a challenging sector for the past few years.

“There seems to have been a good amount of business done overseas of late and this is showing in the rise in value over the past few sales as exporters look at covering wool they have sold forward,” Fussell says.

The company’s South Island auction manager Dave Burridge says demand for the mid-micron wools has weakened with fewer orders coming from Chinese importers at recent sales in Christchurch, but there was strong support for the Merino wool offering, particularly from one Australian-based wool exporter.

Strong wool prices have also strengthened at recent sales. At the September 14 South Island sale, the strong wool indicator lifted 7c/kg clean from the previous sale and crossbred fleece and second shear wools all lifted between 3 and 8%.

All eyes now turn to the bigger volume of hogget wools about to come on tap in both islands. Burridge and Fussell are confident demand will be sustained.

“There’s not a big backlog of wool in our stores, so that will help with demand for what is coming through the auction system,” Burridge says.

“A lot of farmers have chosen to take the prices on offer, they want the cash flow to help get them through till they start seeing lamb income come onstream.

“There’s good interest in the hogget wools that are coming through from September through to mid-November,” he says.