New Zealand wool prices rose at the latest auction as a decline in the local currency made it more attractive for overseas buyers.
The price for clean 35-micron wool, a benchmark for crossbred wool used for carpets and accounting for the majority of New Zealand’s production, rose to $5.90 per kilogram at yesterday’s South Island auction, from $5.75/kg in last week’s North Island auction and $5.80/kg at the previous South Island auction, which was the last of the 2014/15 season on June 25, according to AgriHQ. The price for lamb wool held at $7.20/kg for the third consecutive auction.
New Zealand’s currency has fallen sharply over the past week as traders price in increased interest rate cuts as dairy prices remain lower for longer, weighing on the nation’s economic growth. At 8am on the morning of this week’s sale, the kiwi was trading at 65.92 US cents, 2 percent below its 67.27 cent level a week earlier.
“The lower New Zealand dollar saw most wool types increase at the second auction of the 2015-16 season,” said AgriHQ analyst Emma Dent.
Some 7,942 bales were offered for auction yesterday, with an 88 percent clearance rate, the first dip below 90 percent since March. Next week’s North Island sale includes 6,000 bales, 32 percent less than anticipated after poor weather delayed shearing.