Wool prices drifting lower, report

A new report on wool prices indicates a mixed outlook.

The ASB commodities report says overall, coarse wool prices have fared much better over 2018 than in 2017.

In the last 10 months, 37 and 39 micron wool prices have lifted 23 percent and 11 percent respectively, as compared to the same period in 2017.

However ASB Rural Economist Nathan Penny said the outlook for coarse wool prices remains soft and prices remain low compared to historical averages.

"Indeed, despite robust global growth, 39 micron wool prices remain stuck 21 percent below post 2015 averages," he said.

Mid-micron wool prices have fared better. Prices have lifted over 2018 as healthy global growth has translated to higher demand for apparel. Prices for 29 micron wool have lifted 16 percent so far this year.

"From here, we expect prices for all wool types to drift lower,while the global economy is slowing a touch, notably in China," Mr Penny said. 

Mid-micron prices are expected to remain at healthy levels, but coarse wool prices look likely to ease towards recent lows.

Meanwhile the ASB Commodity Price Index fell 1.9 percent in NZD terms in the week ending November 2.  

Most of the dip owed to a surging NZD/USD, with the Index actually rising a touch in USD terms.

The small rise in NZ commodity prices in USD terms was across most commodity types, with the exception of dairy.

Forestry and fruit prices both lifted 2.3 percent in USD terms, while sheep and beef prices posted a 1.2 percent increase.