Thursday, March 28, 2024

Bidders like hogget wool

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Strong bidding pushed Otupae Station’s 16,240kg of 32.5-micron hogget wool to $3.08/kg greasy in a difficult Napier market. That is equivalent to a clean price of $3.97/kg.
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There were three serious bidders for the wool from the big, inland Hawke’s Bay station from its late-October hogget shear offered on November 8 in very good colour and consistent 2-to-3-inch length, PGG Wrightson North Island auctioneer Steve Fussell said. 

The wool was bought by a New Zealand export company and will be sent to Sweden to be made into felted blankets.

Good, large individual lines of wool are favoured by buyers for the consistency of quality over the offering, Fussell said.

Hogget wool demand is very much micron-driven and the 32-level is at the fine end of the crossbred range so is well sought-after though Otupae’s was higher than expected.

The overall Napier auction was held under very trying conditions.

Most wool types were back in price, some significantly. 

For full fleece, good-style 35-micron was up to 11% cheaper and 37-micron and stronger 9% to 11% lower.

For second-shear, good style 2-to-3-inches was 7% to 8% lower and 3-to-4-inches wool was off up to 10%.

The timing of the price downturn is unfortunate because some very good quality new-season wool is coming forward, Fussell said.

Price weakness is largely created by United States trade tariffs on China. 

NZ doesn’t send much wool directly to the US but a lot goes to China for processing and manufacturing into consumer products sold into the US. 

That has affected business and raw wool demand and is compounded by an associated weakness in the Chinese currency, which makes wool more expensive for Chinese buyers.

The European and British market remains very solid and generally sets the market but the big price lifts the wool growing-sector needs depend on the huge volumes bought by China, which just aren’t happening at the moment. 

As worrying as the crossbred wool market is for growers, merchants and exporters the market has recovered well from the poor 2017 lows, ASB Bank says in its latest Commodities report, though the outlook remains soft.  

In the first 10 months of the year 39-micron rose 23% and 37-micron by 11%.

ASB expects all wool-type prices to drift lower as the global economy and notably China, slows. Mid-micron wools have improved sharply this year and should remain at healthy levels even if a bit softer but crossbred prices are tipped to ease back more significantly.

The 8632ha Otupae Station in the Gentle Annie road area between Taihape and Napier has been owned by James Williams’ family since the 1930s. Known as hard country, with cold winters and desert-like summers, the 5100ha of pasture carries 21,000 Romney ewes and 2400 Angus breeding cows and heifers.

Otupae’s main wool clip, which comes into the store in March, is sold under a Wrightson Flexi-wool contract that started in July last year, linked to demand from the group’s international supply-chain partners. The contract price is about 80c/kg above the current market, Fussell said. 

However, the contracts can be offered only to meet specific international orders, which limits their availability.

Napier sale (prices per micron level and kg/clean): Full wool, good to average colour. 30-micron, $5.71/kg clean, steady; 33, $3.94, down 35c; 34, $3.13, down 38c; 35, $2.97, down 32c; 36, $2.98, down 24c; 37, $2.85, steady; 38, $2.98, steady; 39, $2.83, down 43c.

Crossbred second-shear: 37-micron, 3-to-4 inches, $3.02, down 29c; 2-to-3 inches, $3.13, steady; 39, 3-to-5 inches, $3.02, down 28c; 3-to-4 inches, $2.98, down 17c.

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