Wool report: The impact of drought and coronavirus

PGG Wrightson's GM for Wool Grant Edwards. Photo / Supplied

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The Country's Jamie Mackay catches up with PGG Wrightson GM for wool Grant Edwards and things are looking uncertain in the wake of the Corona Virus.

A good proportion of wool goes to China and Mackay said he was expecting the worst from yesterday's sales in the North and South Island.

Edwards suggested the strength of the market was encouraging and agreed that it could have been much worse.

Recent export figures showed that 95 per cent of New Zealand's wool is exported, with China taking around 45-50 per cent of that production.

However, Edwards explained, this has been on the decline over the past six months and has reduced to around 37 per cent.

Some of this movement had transferred to India and also European markets which held a steady 10 per cent.

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Mackay noted that while coronavirus was a concern, one of the main wool-selling platforms in Australia was also battling a cyber-attack, and this was affecting New Zealand's wool market.

Edwards explained the platform had suffered a cyber ransom attack which had resulted in Australian sales being postponed to next week, and this had a knock-on effect on New Zealand.

Mackay asked how the wool market was coping after taking a hit due to the droughts along with the coronavirus.

Edwards explained earlier on there was an increase of lambs having to be killed without being shorn. To combat this, freezing companies had put out a premium on shorn pelts which will increase this lamb shearing.

Edward touched on another effect of the droughts, being that there was an increase in vegetable matter in the wool.

Due to this, wool has had to be significantly discounted with High VM which is climatic driven, and something that farmers and growers are unable to do anything about.

Mackay finished up on a hopeful note, saying the market will be looking more positive for the next interview in a months' time.