Merino wool is fetching prices at auction not seen since the late 1980s and early 1990s.
Last week's South Island wool sale in Christchurch was "outstanding" for merino and mid micron wool, following on from the continued strengthening in Australia, Roger Fuller, of CP Wool, said.
Australia was experiencing horrendous drought conditions, which was reflected in the prices being achieved in New Zealand.
The problem would be exacerbated next year as a lot of sheep would not survive the dry conditions, Mr Fuller said.
It was a "volume thing" for merino, as Italian mills needed to keep machinery operating and, looking at supply coming forward, the New Zealand clip would be attractive.
A lot of New Zealand wool had been contracted, so there was also a lot of wool not coming forward, he said.
The quality of wool was the best Mr Fuller had seen for a long time. Growers attended last week's sale for the first time in some time.
Mid micron wool, particularly around the 27 micron mark, was well sought after, he said.
The crossbred market showed some positive signs with renewed business from China, especially in finer types, which was encouraging, although prices were still unsustainable.
A range of prices. —
NSK Farming (Hakataramea Valley), 27 bales fine Corriedale, 27 micron, 68.4% yield, 890 greasy, 1301 clean, 32 bales medium Corriedale, 28.2 micron, 70.5% yield, 687 greasy, 974 clean; D W McKenzie (Hakataramea Valley), nine bales merino 2-tooth, 17.1 micron, 70.1% yield, 2259 greasy, 3222 clean, four bales merino, 16.7 micron, 71.8% yield, 2456 greasy, 3421 clean, eight bales merino, 17.5 micron, 72.1% yield, 2274 greasy, 3154 clean; Wainui Station (Kurow), nine bales merino, 18.1 micron, 68.4% yield, 2045 greasy, 2990 clean, three bales merino, 16.7 micron, 69% yield, 2400 greasy, 3478 clean; Pendella Farm (Central Otago), three bales Saxon hogget, 15.4 micron, 73.7% yield, 3010 greasy, 4084 clean, two bales Saxon hogget, 15.9 micron, 75.2% yield, 2939 greasy, 3908 clean, two bales Saxon hogget, 15.8 micron, 76.5% yield, 3000 greasy, 3921 clean; E J Laurenson Ltd (Central Otago), seven bales extra fine halfbred, 24 micron, 76.9% yield, 1539 greasy, 2001 clean, 26 bales fine halfbred, 25.5 micron, 78% yield, 1359 greasy, 1742 clean, 16 bales medium halfbred, 27.1 micron, 78.9% yield, 1026 greasy, 1300 clean; Coolavin Farms (Central Otago), 44 bales crossbred AA, 37 micron, 77.3% yield, 279 greasy, 361 clean; G and P Hunter (Otago), nine bales crossbred AA, 34.9 micron, 78.2% yield, 293 greasy, 375 clean; P and N McNab (Otago), 29 bales Perendale, 34.8 micron, 79.3% yield, 300 greasy, 378 clean; Minzion Station (Otago), 33 bales Perendale 2-tooth, 32.9 micron, 77.5% yield, 373 greasy, 481 clean, 42 bales Perendale, 34.8 micron, 79.6% yield, 306 greasy, 384 clean.