Wool price making a comeback as overseas demand for products rises

Clearing skies. Photo / Alex Braae (@awbraae)

RNZ

Higher demand for sportswear, rugs and other wool products has resulted in a resurgence in wool prices.

Prices across all wool types lifted in the year to October, Beef and Lamb's latest wool export data shows.

Merino was up 28.4 per cent to just over $18,000 a tonne and strong wool, which has been struggling with depressed prices, rose 12.1 per cent.

PGG Wrightson general manager of wool Grant Edwards said prices were lifting due to higher demand.

"A lot of that has been driven in that strong crossbreed space. We are coming off a very very low base but in the same token we are seeing a general increase in demand overseas and we're certainly seeing a waking-up overseas to that natural, biodegradable, sustainable product.

"With the Merino, we've seen prices back up to those extreme highs three years ago, which is based largely around that active sportswear market and to a degree the suit market.

"We also believe the world has settled down as best it can around Covid so a lot more countries are up and running now.

"The mills that we deal with in Europe are really busy they're operating at full capacity."

Edwards said the market had changed a lot in recent months with Covid-related shipping delays and increased costs causing issues.

"We've seen a resurgence with from the Indian markets, and a lot more wool has been exported to India over the last four months than what we've seen in previous years. In the same token we've seen a lot less going into China, though that's starting to balance itself back out."

Edwards said the higher strong wool price meant farmers were no longer making a loss for shearing their sheep but prices were still low and could rise further.

- RNZ