With Chinese buyers still largely out of the market till the end of the Chinese new year holidays at the start of next month, trading remained subdued, AgrHQ analyst Shaye Lee said.
Chinese buying of strong wool was at very reduced levels in the latter part of last year and it would be a “wait and see” situation when they returned.
“The market needs those buyers back,” Lee said.
With the peak of the wool supply season between now and the end of March coinciding with a lull in demand, average to poorer type wools would continue to be heavily discounted.
Some were 4% to 7% cheaper, quite a drop following the big slide in prices through the second half of last year, she said.
“These wools not up to quality highlight the soft footing we have in the market.”
Among Napier prices full wool 35 micron traded up to $3.73/kg clean, off 22c from a week earlier.
A 36 micron price was $3.87/kg clean, just 2c lower, and steady were 37 micron at $3.83 and finer cross-wool 30 micron at $3.86.
For second-shear wool, good three to four inch 39 micron rose 25c to $3.92/kg clean and two to three inch was at $3.83, plus 15c.
Good 30 micron lambs’ wool, two to three inches, was at $4.37, up 22c on a week earlier.
Of the 9236 bales on offer in Napier, the pass-in rate was 17%. That was much higher than the less than 10% pass-in rate at this time last year but it was positive that the rate wasn’t increasing over the high levels in recent sales.
Most of the buying was from the United Kingdom and western Europe, Middle East, India, Australia and New Zealand carpet mills.
Lee expected the return of Chinese buying should offset to some degree the dampening of price expectations over the rest of the peak supply season through to the end of March.
The NZ dollar remaining elevated, at US$0.7168 at sale time, added to the pressure on prices but was a side-factor to the underlying weak demand, she said.
The market would remain under pressure next week, with both a North Island sale of about 8850 bales and South Island sale with up to 9600 bales on Thursday.
