Wool prices in 2015/16 – a tale of two currencies

Ian Buchanan
Ian Buchanan

Currency fluctuations involving both sterling and the New Zealand dollar have combined to bring pressure on wool prices over the past 12 months, according to Northern Ireland’s Wool Board representative Ian Buchanan.

“The last year has seen the $New Zealand devalued by 18%,” he added. “During the same period Sterling was quite strong. New Zealand is one of our biggest competitors on international wool markets and, as a consequence, the combination of both currency movements served to bring pressure on prices achieved at the board’s monthly auctions in Bradford.

“The end result of all this will be smaller balance payment for 2015 than might have been the case, had these currency issues not impacted on the market in such a significant manner.

“The new wool season got underway on May 1st. Producers will receive their advance for 2016 and the balance payment for last year directly after they deliver their 2016 clip to the board’s depot at Muckamore in Co Antrim.”

Buchanan confirmed that the board achieved an almost total clearance of last year’s UK wool output.

“Demand remains strong for finer wools,” he added.

“But the real impact of last year’s price downturn was felt specifically where carpet wools are concerned. In light of this the board is about to launch a new marketing campaign, highlighting the benefit of woollen carpets.”

Buchanan also confirmed that international wool production is due to remain static over the next 12 months.

“This is good news for local sheep producers, looking ahead,” he stressed.

“The recent weakening of Sterling should also help to boost prices over the coming months. But the reality remains that wool is an internationally traded commodity with prices wholly dependent on supply and demand.

“The Wool Board continues to play a vital role in delivering the best possible returns for local sheep producers,” he added.