20 Aug 2008

Wool supply in decline

12:53 pm on 20 August 2008

A decline in wool supply is becoming a worry for wool exporters as they go into the new selling season.

The Meat & Wool Economic Service has forecast an 11% drop in sheep numbers this year due to the impact of the summer drought and dairy farm conversions.

As a result of that, it predicts a fall of 8% in overall wool production, taking into account the heavier fleeces many sheep will be carrying because they were not shorn as much last season.

The agency expects slipe wool taken from sheep processed at meat plants will fall by 28%.

Some early season sales have already been cancelled due to the weather.

Meanwhile, prices for cross-bred wool, which makes up most of New Zealand's production, are predicted to rise this season, due to tight supply and a more favourable exchange rate.

Peter Crone of John Marshall & Co says exporters have been picking a lift of 50 cents - $1 per kg for strong wool from the low point reached last season.