Entering into long-term contracts is protecting merino wool suppliers in New Zealand from price fluctuations, according to fine wool marketing company, New Zealand Merino.
After witnessing a sharp increase in prices last year, wool prices have declined this year owing to unfavourable exchange rate and financial crisis in Europe.
Although the situation has hit the fine wool market, the demand and prices are stable in outdoor clothing segment, where the company manages long-term supply contracts between major retail brands and wool growers, John Brackenridge, Chief Executive of New Zealand Merino, said.
He said wool farmers have signed long-term contracts worth about NZ$ 100 million for supplying merino wool to clothing brands. He added that these contracts are providing a degree of stability to both parties.
He further stated that companies like SmartWool, Ibex and Icebreaker have sharply hiked the long-term price they are offering to wool growers.
Fibre2fashion News Desk - India