Price premium for organic wools to the US market

26 Jun '09

2 min read

New Zealand wool growers have an opportunity to benefit from increasing demand for organically grown wool in the United States. Wool Partners International CEO Iain Abercrombie says the company's export arm, Bloch & Behrens, has been working with organic wool growers for two years and has now established regular business in the USA in a joint effort with a large importer in that market, “At this stage we have not been able to source enough wool for their needs, and as a result we are seeing the emergence of a price premium.”

Mr Abercrombie says the US customer is currently paying $1.00 per clean kilo over market prices and is willing to provide a further incentive in the form of a payment towards shearing costs.

The supply will be primarily for use in soft furnishings and as knitting wools, “This customer has committed to pay a further $0.50 cents per clean kilo towards the shearing of wool that meets the organic certification requirements and is committed under contract. We would be delighted to hear from growers who would be in a position to supply into this order and get the benefits accordingly. The incentive can be offered to growers who are able to contract their clip from the next shear, provided they are certified to the correct level and have suitable wool types (good colour second shears and lambs' wool).”

Mr Abercrombie sees this as one manifestation of a larger trend – growing awareness of the unique natural qualities of wool, “While awareness has been at a historic low in recent years, the prospect of a turnaround is strong. To take advantage of it, we must be prepared to commit to a customer-focused strategy that builds on a strong brand and committed supply.”

Organic wools imported into the US require certification under the USDA NOP (US Department of Agriculture National Organic Program), administered under the country's import standards and assessed in New Zealand by BioGro or AsureQuality.

Mr Abercrombie says Wool Partners believes there is a significant layer of New Zealand organic growers who have not yet focused on accreditation under USDA NOP, but are near enough to meeting the requirements to make the prospect realistic. "We suggest that any growers who think they may qualify for USDA NOP certification should contact their certifying body to get their level of certification verified.”

Wool Partners International Limited