12 Jul 2009

Wool price prospects seen as bleak

7:39 am on 12 July 2009

Any immediate prospects of a lift in wool prices look bleak.

But exporters are pinning their hopes on signs that the freeze on demand for carpet wools in particular may be starting to thaw.

The first sale of the new wool selling season at Napier on Thursday saw a further slide in prices for most wool types. Almost 40% of the wool put up for auction was left unsold.

The strong wool price indicator, covering the bulk of New Zealand's wool clip, is now sitting at $2.64 per kilogram - $1 per kilogram below where it was a year ago.

New Zealand Wool Services International says the world recession has made the past six to nine months a very hard slog.

Deputy managing director John Dawson says some major customers in Europe have reported a fall in volume of up to 40%.

However there are signs of improving demand for carpet wool in the United States, he says, and positive signals from Asia as well.