The simple supply and demand curve ruled the fortnightly auction in Napier this week with sellers emerging as the grinners.
PGW North Island procurement and sales manager Steve Fussell said the number of bales offered this sale was around 40% under the rostered amount planned.
“With a full bench of buyers, the sale ended most certainly in sellers’ favour as longer wool types held the most demand, with second-shear wool facing strong bidding throughout the sale,” Fussell said.
Crossbred fleece lifted 4% with good style selling at $3.55/kg (clean), average style $3.40 and poorer $3.17 while second-shear ranged in price from good style longer length at $3.38 down to shorter average style at $3.17.
Looking across the board, PGW general manager wool Rachel Shearer said the wool market has seen mixed results see-sawing across both islands of recent weeks with some auctions favouring sellers and others tipping in buyers’ favour.
Highlights include fierce competition for specialty wools and a buzz around fine wool in Christchurch, thanks to international interest.
The latest trends from the wool auction have generally seen specialty wool types sparking intense bidding, with strong demand driving prices higher.
In the South Island, the recent Christchurch sale marked the first of the weighted fine wool offerings for the season.
One of the main Australian wool exporters entered the fray, adding extra competition and a noticeable buying buzz to the room.
“The result was an upbeat atmosphere and almost a full clearance of lots in the sellers’ favour.
“Some Merino growers, seated in the room, watched as their wool went under the hammer, generally seeing positive results.”
However, crossbred wool offerings in the south continued to favour the buyers, similar to trends seen in the North Island throughout August.
A limited supply of this type of wool kept the market steady, but it remains to be seen whether pricing will improve as the season progresses, Shearer said.
One surprising trend across both islands has been the stronger-than-expected prices for lower-quality wools, both fleece and oddment types.
India has been particularly active in this market, although the rising New Zealand dollar appears to be creating a bit of a standoff with demand from India beginning to taper off.
The Chinese market has also been chasing these lower-grade wools, which has helped elevate prices to date.
“With fewer crossbreds expected on the market over the next few months, the dynamics may remain steady, but whether this translates into better pricing for the entire season is still unclear,” Shearer said.
In Focus Podcast | Sheep outlook: the future of our flock
Sheep farmers are doing it tough right now, with farmgate returns dropping back after a few good years and input costs rising. Add to that the march of pine trees across the land, and there’s talk of an existential crisis. Bryan asked AgriHQ senior analyst Mel Croad to give him the lay of the land and asked her what the sector needed to do to find prosperity again.
