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NZ wool prices fall at auction

NZ Newswire logoNZ Newswire 23/06/2017 Tina Morrison

Sheep farmer Roger Barton shears one of his sheep on his farm in New Zealand's Wairarapa region. © REUTERS/Naomi Tajitsu Sheep farmer Roger Barton shears one of his sheep on his farm in New Zealand's Wairarapa region. Prices fell at New Zealand's latest weekly wool auction, with some grades hitting their lowest level in seven and a half years, amid continued lacklustre demand from China, the largest buyer of the fibre.

At the latest North Island auction on Thursday, 37-micron crossbred fleece wool dropped 25 cents to $3.25 a kilogram from the previous North Island sale a fortnight ago, and was 5 cents lower than last week's South Island sale, according to AgriHQ.

The latest price marks the grade's lowest point since November 2009.

Meanwhile, 30-micron lamb wool fell 40 cents to $3.25/kg compared with the previous North Island auction and is approaching February's low of $3.20, which was the weakest price since July 2009.

The latest declines saw AgriHQ's indicators for all wool styles dropping with the lamb wool indicator down 14 cents to $3.94/kg from last week, and the coarse crossbred indicator down 9 cents to $3.45/kg.

New Zealand is the world's largest exporter of crossbred wool and weak demand for the fibre, which makes up about 80 per cent of the national clip, has weighed on prices this season, prompting farmers to stockpile bales.

The Ministry for Primary Industries forecast that wool export revenue likely fell 28 per cent to $550 million in the year through June as a lack of demand from China weighed on prices.

"Prices continue to fall due to the lack of demand from overseas buyers," said AgriHQ analyst Sam Laurenson. "The entire market remains incredibly weak in comparison to last season and has no sign of improving in the near term."

A decline in the kiwi dollar heading into the sale made local wool even cheaper for overseas buyers, and helped lift the auction clearance rate, with 81 per cent of the 10,760 bales sold.

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