New Zealand Wool Market

After a buoyant start to the year the global financial crisis began to manifest itself in China around April/May of this year. European buyers had already exited the market and China which is normally immune to Global trends discovered with their increased processing capacity they were going to experience some pain as well.

The Chinese buyers who now account for around 50% of the NZ wool exports, lost confidence,stopped buying, this lead to a rapid price destruction for NZ wool prices. From April to August prices for some NZ wool types decreased by 25%. During this period the NZD vs USD moved in a range of 0.8200 down to 0.7600 before settling around the 0.8100 level.

The present situation in NZ is that many parts of the country have been affected by very wet weather, in some regions shearing has been delayed. This has meant that there is a limited supply of well grown, good colour wool coming onto the market. The auction on the 23rd of August had to be cancelled because therewas insufficient wool available.

When this wool finally becomes available it would be reasonable to assume that it will show the effects on the adverse weather conditions and there will less good colour wool available during the traditional hogget season August through November.

Recently we have seen some European buyers enter the market again, no doubt attracted by the lower prices and a necessity to buy some fibre. This combined with limited wool availability ex NZ should lead to the stabilizing of NZ wool prices.

Fuhrmann NZ welcomes the opportunity to participate at the 24th Nanjing International Wool Trade Fair and looks forward to meeting many old friends again.

Nanjing Wool Market must be congratulated for arranging such a prestigious and educational event, where suppliers and customers can meet in the spirit of cooperation and for mutual benefit.