Wool Report: Trade tariffs and tough times

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

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The trade war between the United State and China has set New Zealand wool prices back says Grant Edwards.

PGG Wrightson's GM caught up told The Country's Jamie Mackay that trade tariffs between China and the United States have impacted on New Zealand's ability to trade and export their sheep products to China.

China is an important market for New Zealand, as we export around 51 per cent of our sheep meat there said Mackay.

Edwards noted that last April the United States introduced as 25 per cent tariff on yarn and fabric coming out of China and it is set to rise another 10 per cent at the start of September.

Listen to the full interview below:

Brexit could also pose potential financial market complications, making New Zealand exports vulnerable.

It was also important to keep an eye on the impact of the Australian market to help measure changes said Edwards.

In early July Australia had taken a recess for three weeks, and with their recent return they had seen prices decline on a daily basis.

Although fine wool is still considered New Zealand's silver bullet, there is still a dependency on crossbreed wool said Edwards.

Mackay suggested that farmers are still "stuck between a rock and hard place" when it came to the preparation of their wool for sale. There was a real premium for well-prepared wool as opposed to that which had been just tossed into the bale.

Mackay queried if it was worth it for farmers to get another wool handler to secure return on investment.

Edwards finished on a positive saying some growers have elected to contract their wool which removes some of the vulnerability from the global markets.

However, Edwards reiterated it was not about beating the market, but to link farmers with end-manufactures who have the same principles and understands how the market works.