22 Aug 2012

Too much wool for sale amid low demand

9:30 am on 22 August 2012

The country's biggest wool exporter has criticised large amounts of wool being offered for sale at a time of year when demand is low.

New Zealand Wool Services International says the European recession, an economic slowdown in China and a 60% drop in demand for carpet wool in Australasia have been behind falling wool prices.

Managing director Michael Dwyer says another factor is the decision by farmers and brokers to put up large volumes of wool for auction at a time when demand is usually low.

He says too much wool has been put on the market at a time of holidays in Europe and a downturn in China, and there is not the demand to sustain a viable price.

Mr Dwyer says at one time there were no wool sales in July, then one was held at the very end of July.

"But this year they put 35,000 bales onto the market which shows almost, in my view, an irresponsible attitude."

Mr Dwyer says he hopes brokers review that when deciding wool auction rosters for next season.

'As even a wool flow as possible'

However, Wool Brokers president Philippa Wright points out that exporters are consulted about the amount of wool put up for sale, both at the start of the season and as it's running.

Ms Wright says there's an attempt to create as even a wool flow as possible, both for the grower and the exporter, but weather and a host of other factors can dictate the amount of wool that comes up for sale.

"(In) July we were caught with an extra load of wool because we had rain previously and there was suddenly an extra load,'' she says.

''We considered the exporters wish to cut down on numbers and we did pull back and try to stick as close as we could to the roster organised."