The early rises this year in wool prices excited no one, as they came from a such low base, but the improvement has continued and they are now significant.
Our records show that fine crossbred and mid micron wool indicators are the highest since our site began in 2005. Also Merino and Coarse crossbred wools are very close to the 2008 highs.
And what makes it even more remarkable, is this rise is in spite of a strong currency.
But with many farmers losing respect for the product and its marketers because of years of low prices, the industry needs to use this unexpected high, to ensure these rises are locked in for years to come.
Crossbred wool prices have climbed rapidly in the past month renewing hope that annual returns will get back to the $600 million mark last seen in the commodities boom. Prices for best-style clean fleece are up 33 per cent and second-shear is up 38 per cent on a year ago to $3.95 a kilogram, prices reached more than two years ago as the world economy boomed. Exporters report confidence is returning to the affluent European market at a time when wool is in short supply in the NZ winter.
The sharpness of the rise is said to be due to the end of a stockpile of wool, kept in farmers' sheds or in agents' stores around the country. It was built up over a year or more as farmers waited out a price slump caused by the international credit crunch. What makes the rises even more remarkable, compared with a year ago, is the difference in exchange rates. The euro, at NZ56.5c is 15 per cent above the 49c it was worth in September last year.
It is not just coarse crossbred wool, used in carpets, rugs and textiles, that is lifting, but also the finer wools used in clothing. Top-quality merino is up 15 per cent at $15.50 a kg on a year ago and medium-fine is also up 15 per cent at $8.75. Exporter Peter Whiteman, managing director of Segard Masurel, was optimistic yesterday. "I don't want to be too rosy, the residential market in Britain is still sluggish, and no doubt carpet manufacturers in Australia and NZ would say the same. But Europe is a bright spot."
"The people who really need wool are coming back," he said. "The people who delayed their decisions in the recession are now being forced to make up their minds. Also helping were flooring shows featuring colourful new carpet designs and promotion by the International Wool Textile Organisation, such as bringing leading architects to NZ to renew interest in wool.
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