Fashion demand buoys price of wool

Merino prices are up 50 percent on last year thanks to strong fashion demand.

Sales of fine wool this week were up 3 to 7 percent, with fine merinos going for $30 a kilogram, clean.

It's down to a global demand for quality clothing.

"There's two things driving the prices," says wool general manager for PGG Wrightson, Grant Edwards. "One, it's the sporting apparel. We've had a huge increase in merino wools going into that sporting apparel. Also we're still seeing a strong benchmark from that Italian market, the suiting market. Plus we're seeing diminishing merino numbers around the world."

Murray Crane says there's strong demand for high-end, lightweight, sustainable performance fabrics.

"You're seeing a great drift towards people wanting something that's unique, whether it's the way it's made - if it's made specifically for them - or they want to be able to know the provenance of where it's come from," says Mr Crane. "It's all about being to know that it's a New Zealand wool, that it's been grown in a beautiful farm."

He's seen that demand drive fabric prices up 10 to 15 percent this year, but he says it's not a bad thing.

"I'm glad that the price is going up because if the demand's there it means we're going to keep growing good wool here and it's good for the growers."

The exchange rate has softened the blow for consumers until now, but prices could go up.

Though not all wool farmers are benefitting, while fine wool is booming, crossbred clips are suffering.

"In the fine wool sector, yes, it's been very good, but fine wool only makes up about 5 percent of the national clip," says Federated Farmers meat and fibre national chairman, Miles Anderson. "The bulk of our clip is a crossbred wool, which is a stronger micron, and that is currently languishing at all-time lows."

Prices for crossbred wool are 50 percent down on last year as the demand for wool carpets, tweeds and felts has tumbled.

Crossbred wool prices saw a slight improvement this week, and Mr Anderson hopes it too will come back in fashion.

But it's a long way off the booming trend for merino.