11 Nov 2020

Demand for wool up after slump due to Covid disruption

4:44 pm on 11 November 2020

After suffering a serious slump the wool industry has nearly managed to claw back prices to pre-Covid levels.

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Photo: RNZ / Cosmo Kentish-Barnes

The disruption to the supply chain caused by Covid-19 had resulted in significantly reduced demand from overseas mills.

PGG Wrightson general manager for wool Grant Edwards said during lockdown the industry experienced a 35 to 40 percent drop in prices for all types.

Edwards said in the last few weeks there had been a notable recovery and much of those losses had been clawed back.

"[We're] close to being on par to where we were pre-Covid. Some half-bred wool types would certainly be back at pre-Covid levels, where as crossbreds would be very close and merinos are closing in."

He said while it was encouraging to see these lifts, at this time of year there was no significant crossbred wool on the market.

"A degree of that [lift] is supply and demand driven," he said.

AgriHQ said October wool sales were positive in the North and South Island, which was achieved by enthusiastic bidding and the shortage of wool on the market.

Over three sales in Napier, the strong wool indicator rose by 46 cents/kg, after lifting by progressively larger increments each sale. South Island sales also brought price increases in October, and a buoyant market increased the strong wool indicator by 32 cents/kg.

Merino wool showed a price improvement too. The second sale of October had 16-micron fleeces trading for $21.20/kg and 18-micron fleeces trading for $17.60/kg.

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