Wool brokers say, despite the first sale of the season being disappointing, suppliers shouldn't react too quickly by dumping large quantities into a fragile market.
Peter Tate: "Up until this happened, our supply and demand equation was pretty good." Photo: Supplied
Clean wool sold for just $4.54 a kilogram at the North Island's first sale of the season on 7 July, compared with a peak last season of $6.62 a kilogram.
Independent Wool Brokers spokesman Peter Tate said the poor start to this season was due to a perfect storm of events.
"The very high New Zealand dollar, Brexit, Britain selling wool at a much cheaper level due to the drop in the pound, a slowdown in Chinese demand due to the weakening of their domestic economy, a build-up of wool inventories and the northern hemisphere being at the height of their holiday season is impacting on wool-buying."
Mr Tate said prices should pick up as the wool season gets under way because of increased interest in the product.
"Up until this happened, our supply and demand equation was pretty good, we finished off the season with no big inventories, we're not seeing the huge over-supply that we saw back in the early 2000s.
"There is a lot of promotion of wool going around at the moment, especially with the Campaign For Wool and Prince Charles' promotion of wool - it seems to be generating increased demand in the northern hemisphere."
Shorter and poorer colour wools could struggle for another month or so, he said.
The next North Island wool sale is tomorrow in Napier.
Raukura Station in Tiniroto: The next North Island wool sale is tomorrow in Napier. Photo: Supplied