Oct. 15 (Bloomberg) -- New Zealand wool prices continued a three-month surge amid renewed demand from China and India, overcoming concerns that the stronger New Zealand dollar would dampen sales.
The benchmark price jumped 10 percent from September to NZ$4.79 ($3.64) a kilogram at auction yesterday, New Zealand Wool Services International Ltd. general manager, John Dawson, said. Prices have surged 42 percent since July’s auction, he said in a telephone interview today.
“It’s a measure of the strength of the market,” Dawson said. “The New Zealand dollar should have been a negative factor but it’s been ignored and the market has gone up.” New Zealand’s dollar closed at 75.92 cents yesterday after touching 76.44, the most since July 2008.
New Zealand farmers produce about 40 percent of the heavy-grade crossbred wool used by the world’s carpet markets. Wool prices rose 12 percent globally in September to hit a 14-year high, according to Australia and New Zealand Banking Group Ltd.’s September commodity price index.
“This is not a New Zealand-only situation,” Dawson said. “The Australian market is rising, the UK market is rising, cotton is rising and competing fibers from other countries are rising. It’s a global trend.”
Continued demand from China, India and Western Europe and a reduction in wool supplies globally may see further price increases, Dawson said.
“We expect the market to remain where it is for a while, if not go even higher,” he said. “It all comes back to the demand situation and we see it continuing quite positively.”
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