Wool export to China falls significantly

01 Jun '07

1 min read

The decrease in wool export volumes was spread across many export destinations. Exports to China, the highest volume and value export market for NZ wool, fell significantly. Woolmark has previously reported that New Zealand's wool exports are losing share to Australia and Uruguay in the Chinese market.

New Zealand's wool prices increased for the 2006/07 season to February (prices for February are an indicator of exports in March due to a delay because of shipping preparation).

However, in US dollar terms, prices for fine crossbred and coarse crossbred increased negligibly, suggesting that the price increases in New Zealand dollars are related to the US$/$NZ exchange rate.

The increases are in contrast to a long term decrease in NZ wool prices in New Zealand dollars, which persisted despite or perhaps because of the price premium once paid for New Zealand wool for its superior whiteness, brightness, strength, and lower vegetable matter.

This premium is being eroded because of the introduction of exotic sheep breeds for meat production, which increase contamination from black and dye-resistant hollow fibres and reduce the wool's length and strength, and because of the increased dominance of low-price, high turnover processors.

Australian Wool Innovation Limited

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