WOOL EXPORT STATISTICS SHOW TONNAGE DOWN, PRICES UP - 2 April 2009

Meat & Wool NZ Economic Service export statistics for the current season show that New Zealand is taking a heavy hit on the amount of wool exported but that the average prices so far this season have been better than expected.

Wool Exporters Council president Mr John Henderson said today that in the season to date New Zealand has exported 20 percent less wool than in the same period last season but that the total value of those exports is only down by 9 percent, meaning that the average price per tonne has been higher.

This is evidence that exporters are doing a good job, in spite of the difficult global economic conditions, Mr Henderson said.

“Although wool prices have been under heavy pressure since the start of the year and there is not a lot of new business around, the average export prices and therefore the average price to farmers has in fact been significantly better this season compared to the same period last season.

“The official statistics show that the price of fine crossbred wool has increased by 15.8 percent, strong crossbred by 11 percent and mid-micron wool by 5.4 percent.  Despite the sudden dip in prices over the last few months, these export figures mirror the average auction prices for the season to date quite closely and prove that the farmer does get a direct benefit from the present system.”

“While wool prices are unacceptably low across the board, those sorts of increases have only been achieved by New Zealand exporters holding a very firm line in a rapidly softening market” said Mr Henderson.

Mr Henderson said that the traditional big markets for New Zealand wool have all shown large reductions in volume so far this season.

“The UK is down about 26 percent Italy is down over 15 percent, Iran is down a massive 76 percent, the US is down by 21.5 percent, Japan is down 27 percent, India by over 19 percent and Nepal by 24 percent.  

“The only country holding its own is our biggest individual market, China and that is probably because of the tariff benefits that came with the Free Trade Agreement.  This means that the exporters have been very successful in getting wool into the smaller markets to compensate for some of these reductions. ”

Mr Henderson said that the continuing softening of demand and the recent rise of the NZD are likely to put further pressure on the industry and therefore it is unlikely that exporters or farmers will have anything to be happy about in the foreseeable future.

“But I would caution farmers against putting any faith in Wool Partners International being able to match the export performance of the existing industry, let alone being able to do any better,” Mr Henderson said.

For further information contact John Henderson Tel 021 321 699 or Nick Nicholson Tel  021 430 586. Released by Iain Morrison from Morrison McDougall.