Nobody guessed wool would go this high

Wow for wool continues

Rural News

Wow for wool continues

4th Mar 11, 4:22pm by Tony Chaston

Wool prices continued to firm at auction with this weeks offering driving values ahead by between 3-9%.

Average indicator levels for the coarse wools increased to 561 cents, and the fine wools broke through the $6 barrier at 616c.

Lambs wool which dominated the sale and had been off the pace for the two previous consignments, bounced back on good demand to reach 618 cents.

Growers offered nearly 20,000 bales and sold 98% of the sale.

The easier currency did help with the basket easing by 1.52%.

Prices are being helped by cottons near record price levels despite production being at its highest world wide.

The strong meat prices internationally are keeping world sheep numbers from growing, and this is predicted to continue for a while yet.

This should restrict the volume of wool influencing prices and keep demand strong.

Wool indicator prices

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Source: refer to schedule page

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4 Comments

by iconoclast | 5th Mar 11, 12:19pm 1299280766

[quote] Prices are being helped by cotton's near record price levels despite production being at its highest world wide [endquote]

To the best of my knowledge, the main driver of wool prices is the "price of oil". Wool fibre is inter-changeable with synthetic fibres. As the price of oil increases so the price of synthetics become less competitive and manufacturers turn to alternatives ie natural fibres. When oil was at $30 pb the cost of synthetics was at its lowest. With oil back above $100 pb, the cost of synthetics will become less attractive and natural fibre more attractive. The best of the wool cycle is about to come.

by Kunst | 7th Mar 11, 9:47am 1299444439

Thoughtful comment ! Wool processed – lead into long- lasting, highly quality products.

by Andrewj | 5th Mar 11, 1:05pm 1299283525

30 years ago I worked with merino's, from memory we got $23 a kg for main shear and $28 for hogget wool. Want to bet 9 mill on a sheep farm? Its got too complex to make sense of. Synthetics may be part of it but that never happened in previous oil spikes. House building in the west is at all time lows. China undercutting woolen mills in the west may be part of the story, its certainly behind the Linen boom.

I think its just a commodities boom and I think that at $6 wool is still too cheap. In the 80's we got more for the wool than for lambs. I worked on a station and the owner said to me "as long as we get more for the wool than we do for a lamb we should be ok", he's no longer farming and I don't have a clue where wool is going but if its a cycle its a bloody long one.

I'd like to add that ewe lambs are selling for more than ram lambs in the store here. This is finaly the rebuilding of the sheep flock, two consequences; a lot less lamb kill and a bigger proportion of smelly ram lambs on the super market shelf. If wool keeps going then the shift back to sheep is going to be interesting for the meat industry, with a bit of luck we should be able to rebuild the flock in time for the next crash.

by Simfarmer | 6th Mar 11, 10:49pm 1299404958

Just brilliant to see some decent prices for wool and some happy farmer faces in woolsheds. Hope this finally kills off the composites and completes to move back to the romney or perendale etc. Composites are a road to nowhere ! Hopefully we havent left it to late the the black spots that have become prevelant in a crossbred (particularly composite flocks) can be eradicated.

And on a different note I think the guy in that photo is Jon Pomare who when I last saw him was still shearing at 75. He shore a 300 on lambs when he was around 73 I think - a Canterbury legend !