Demand for Merino wool has taken a hit, with fine wool prices at auction back by about 40 percent on this time last year.
Merino sheep are typically shorn between July and October. The main selling period for this wool runs from August through to early December.
Crossbred wool, typically used in carpets, makes up about 85 percent of New Zealand's wool clip. Fine wools such as Merino attract a premium price and are often used in high end garments including sportswear and suits.
AgriHQ said at auction fine wool in the 17-18 micron range was fetching $13 to $15 a kilogram clean, down 35 to 40 percent on last year.
PGG Wrightson's general manager for wool, Grant Edwards, said the economic pressure created by Covid-19 had resulted in there being reduced demand for fine wool. Coarse wools, which were already under significant price pressure prior to Covid-19, have also been impacted.
"It's tough going for fine wool prices, Merinos are back around 40 percent on the same time last year... the world is in a degree of turmoil and it's really affecting our supply chain"
He said one positive was that many Merino farmers did have forward contracts secured, so they didn't have to operate on the open market and would have secured better prices.
Edwards said it was hard to know when the market conditions would improve.