Cautious tone at opening wool sale of new season

The first South Island wool sale of the 2017-18 season opened on a cautious note compared with the last sale of the previous season.

The crossbred wool sector ended last season with its worst year since the 2007-08 global financial crisis.

Most crossbred types were on par to slightly cheaper at the Christchurch sale yesterday and second-shear fleece and oddments were most affected, PGG Wrightson Wool’s South Island sales team said.

More notable was the lift in the market for finer crossbred and out-of-season lambs wool which reversed the trend for those types from recent sales.

About 20% of new season fleece wool and oddments were withdraw before sale, indicating further resistance from growers to offer and sell wool at those levels.

Roger Fuller, of CP Wool, said the quality of the new season offering was "outstanding".

Rabobank’s latest agribusiness monthly said crossbred wool prices could not recover until China’s wool stocks depleted, as no other market had the capacity to absorb the volumes that diminished Chinese interest had left.

Exports of New Zealand wool to China declined 37% in 2016-17. Uruguay and the United Kingdom were also struggling to command Chinese buyer attention.

However, Australian wool volumes into China had grown considerably in the same period. That disparity between coarse and fine producers reflected clothing being the only exception to China’s overall trend of decreasing export of wool products.

Wool garment exports had boomed 144% higher year-on-year to April. The majority of growth was in emerging markets in Nigeria, Saudi Arabia, India and Taiwan.

Export volumes in 2016-17 into South Asia increased by 2000 tonnes compared to the previous season, the only export market to grow.

The Indian textile industry had grown at 10% each year from 2013 to 2016, led by bedding and home decor products, and was predicted to double in size within 10 years.

While South Asia took less than a third of the New Zealand wool of its northern neighbours, it should provide some continued demand for coarse wool.ASB’s Commodities Weekly report said wool prices had averaged more than 20% below their 10-year averages so far over 2017.

A range of prices. —J and H Willocks (Otago), 29 bales Romney, 38 micron, 81.5% yield, 270 greasy, 331 clean; D and C Graham (Otago), 11 bales crossbred 2-tooth, 35.8 micron, 81% yield, 268 greasy, 331 clean; N and J Joyce (Otago), 13 bales crossbred 2-tooth, 38.8 micron, 83% yield, 271 greasy, 326 clean; Kanuka Hill Ltd (Otago), 48 bales crossbred AA, 39.1 micron, 81.6% yield, 274 greasy, 336 clean; P and N McNab (Otago), 24 bales crossbred hogget, 31.9 micron, 77.5% yield, 382 greasy, 492 clean; A J and C E Wither Ltd (Outram), 26 bales crossbred AA, 33.9 micron, 77.3% yield, 306 greasy, 396 clean; D G and F H Richards (Outram), 38 bales Romney AA, 36.9 micron, 79.8% yield, 271 greasy, 340 clean; Horsehoof Station (Outram), 47 bales crossbred AA, 36.5 micron, 79.6% yield, 261 greasy, 328 clean; Glenspec Holdings (Ranfurly), 19 bales medium halfbred AA, 24. micron, 76.7% yield, 890 greasy, 1160 clean; Est E T Beattie and Son (Outram), 50 bales Perendale AA, 34.3 micron, 81.4% yield, 316 greasy, 388 clean.

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