Wool prices hard to predict
Amuch improved wool market is coming into position in the next few months and will reveal if prices will hold.
Wool experts are finding it difficult to predict the carpet wool market’s next movement because of opposing tensions between tighter supplies and better prices on one side, and Europe’s financial troubles and more wool entering from summer shearing. Average wool prices have remained above a clean price of $6.50 a kilogram ($5.20 a kg greasy) for the last five months, after rising steeply from $4 a kg clean in September last year.
Wool Partners International marketing executive Malcolm Ching said the market’s position hinged on what would happen with financial markets offshore, particularly in the euro zone with confidence starting to waver. The market might become more volatile in the next few months and follow a zig-zag pattern but could improve again, as there was not much wool around, he said. ‘‘There are as many positive as negative factors. Unfortunately, we don’t know how it will go until it happens.’’
Crossbred wool prices for the carpet wool sector are at a clean level of $6.45 a kg to $6.80 a kg for all lengths and most microns.
Perhaps offsetting the influence of Europe’s credit crisis will be the shortage of wool internationally, with some companies expecting less wool this season because of competition from other agricultural activities, chiefly dairying. Clearance rates have been low at the Christchurch wool sale in the last month, with much of the wool passed in being traded soon afterwards.