Wool prices ease back as trade tension bites

A SIGNIFICANT correction for midmicron and finer wools was seen at last week’s South Island wool sale, in line with a fall the previous day in Australia for similar wools.

The continued trade war standoff between the United States and China was now having a greater effect on global wool trading conditions, less new business being written with Chinese traders, PGG Wrightson Wool’s South Island sales team said.

Both midmicron fleece and merino fleece were 5% to 8% cheaper. An excellent offering of prelamb shorn fleece resulted in the market tending in buyers’ favour for crossbred wool.

Crossbreed fleece (3135 micron) was down 1% to 3% on a limited offering while 35 micron and stronger was 2% to 3%.

ANZ’s latest Agri Focus report said interest from Asian buyers remained subdued which was a concern given China accounted for half New Zealand’s wool export revenue.

Chinese buyers had been ‘‘dipping in and out’’ of the market in recent months, likely affected by trade tensions with the US reducing demand for their end products. That had left the buying bench ‘‘rather bare’’, the report said.

South Island growers were generally doing better than their North Island counterparts due to their finer grades of wool being more closely aligned with buyer demand.

It remained difficult to find buyers for poorer quality wool or any types and coarser grades of wool, resulting in low returns.

At current prices, returns from coarse wool were not covering shearing costs, which did not bode well for the future of the industry. A range of prices.—

Pannett Ltd (Roxburgh), 47 bales crossbred AA, 35.4 micron, 81% yield, 257 greasy, 317 clean; G F Dowling LTd (Ranfurly), six bales halfbred hogget AA, 23 micron, 74.5% yield, 1270 greasy, 1705 clean; E G Ludemann Ltd (Oamaru), 41 bales crossbred 2tooth AA, 38.2 micron, 82.3% yield, 280 greasy, 340 clean; S H Andrews and Sons Ltd (Ranfurly), 42 bales crossbred AA, 38.1 micron, 75.4% yield, 244 greasy, 324 clean; Ivybridge Ltd (Ranfurly), 23 bales medium halfbred AA, 27.6 micron, 79.4% yield, 786 greasy, 990 clean; G T Davidson (Lawrence), 40 bales crossbred AA, 36.5 micron, 81.3% yield, 295 greasy, 363 clean; K G and F A Thompson (Ranfurly), seven bales medium halfbred hogget AA, 20.9 micron, 78.1% yield, 1375 greasy, 1761 clean; C Inder Holdings Ltd (Ranfurly), eight bales fine halfbred 2tooth AAA, 27.4 micron, 79.8% yield, 800 greasy, 1003 clean; D R Carey Ltd (Ranfurly), 11 bales fine halfbred AA, 23.7 micron, 79.1% yield, 1160 greasy, 1466 clean; Gavin D Tisdall (Palmerston), six bales crossbred hogget AA, 34 micron, 76.5% yield, 330 greasy, 431 clean; Gladford Station Ltd (Outram), 44 bales crossbred AA, 37.7 micron, 80.7% yield, 300 greasy, 372 clean.