Exporters say wool has turned the corner

The NZ wool market has turned the corner and members of the wool exporters' council expect demand for coarse wool will remain strong, with prices continuing to rise over the coming months. Strong demand held prices steady at their higher levels at today's auction in Christchurch, where 20,000 bales of North and South Island wool were auctioned. The increases mean more money has started to flow back into farmers pockets, with auction prices pushing ahead of the strong and volatile NZ dollar. The exporters' council members, who collectively buy, market and sell 85 percent of the NZ clip said gradual price increases over the last 12 months had been swallowed by the increasing NZ dollar reports Scoop. But the recent surge in demand had enabled wool prices to break free from currency effect and now represented good news for beleaguered wool growers. Since mid-January there have been week-on-week auction price increases that have gathered momentum over the last few weeks. Exporters are unanimous the market has turned the corner and are "reasonably optimistic" the rising market is sustainable. Peter Crone from John Marshall & Co who is just back from a major international fair in Germany where he has been marketing a new bedding product, said the big mills in Italy, United Kingdom and other parts of Europe had used up their stocks and a recent surge in demand had seen them come back strongly into the market. The supply of wool has been falling over the last few years, they've used their stocks and now have to replenish their supplies to fill their orders, he said. NZ farmers normally got a premium over other world wool producers, but at the moment growers in the United Kingdom were getting a $1 kg more due to an unprecedented 45 percent jump in prices for British wool over the last few weeks. Mr Crone said this indicated there was still more upside in the New Zealand prices, especially if demand continued to improve.