Wool prices rise despite exchange rate

Prices at this week's wool sale once again continued to rise, despite a negative influence from currency exchange rates.

Prices for customers purchasing in United States dollars have now increased by more than 6 percent since early July, while the exchange rate has climbed 1 percent over the same period, New Zealand Wool Services International Ltd (WSI) reported.

The NZ dollar rose from US69c in early July to US70.19c yesterday, jumping to US71.28c today.

WSI said that since the previous offering on August 26, the New Zealand dollar has increased in value against a weighted indicator of the main international wool trading currencies by 1.02 per cent, but continuing strong demand evident over the past few weeks over-rode that effect.

Historically, auction commentators have said a weaker exchange rate tended to lift prices and they have blamed low prices on stronger exchange rates for the New Zealand dollar.

In this week's combined auction of North and South Island wool, 89 percent of the 9000 bales on offer sold.

According to Wool Services International, today's prices for mid micron fleece were up by between 2 percent and 5 percent, while fine crossbred fleece and shears rose by between 1 percent and 4 percent.

Coarse crossbred fleece was firm to slightly stronger, while coarse shears lifted by between 1.5 percent and 3 percent.

Oddments ranged from firm to 4 percent higher.

Buyers from India, China, the Middle East and the United Kingdom dominated strong competition at today's sale. Interests from Australasia and Western Europe took supporting roles.

Next Thursday's auction will be in Napier and Christchurch, offering about 6600 bales from the North Island and 5800 bales of South Island wool.