Demand for high-end woollen flooring is in resurgence globally, says Cavalier chief executive Paul Alston.
A drift down in our wool volumes has been matched by the drift down in wool demand, he says.
“In the end it all sort-of balances out and keeps us at a similar level for supply/demand and then it comes down to what is fashion, what is ‘hot to trot’ at the moment for consumers,” Ching explains.
“Is the American economy doing well? Is there a cold winter in Northern Europe or somewhere else where wool again is seen as being a desirable product to have in carpeting, clothing, upholstery or blankets instead of synthetic?
“It doesn’t take much, a very small percentage shift toward wool again and it can impact greatly here. That is probably what has been pushing our prices around a bit more lately.
“Wool has been a bit on the increase as a desirable textile in the past couple of years so hopefully that will continue and minimise any downside.”
Palle Petersen, general manager, Bloch & Behrens Wool, the wool export arm of PGG Wrightson, says anything with a finer micron seems to be selling pretty well.
“A lot of these short wools, if they were a bit finer crossbred, would have gone into carpet wool but now that seems to be going into other products – cloth for coats and that sort of thing.
“That is taking the volume out of what goes to the carpet industry and it has also helped to keep prices at pretty good levels. There is a broader range of end products that New Zealand wool seems to be getting into these days, so we are not as reliant on the carpet sector, which is healthy. But it still is a big factor.”
Ching says a factor which drove higher prices this year was when people put a percentage of NZ into their product mix they probably put too much relative to what was available to our market with the high dollar.
“Because of that some of them, where they can, will be reducing the amount of NZ wool in their product and substituting. But they still will need a percentage of it.
“Then there are those whose products are made out of 100% NZ wool and they can’t afford to go anywhere else so they have to pay the price.
“But it squeezes their margins and long term it makes them think about what would they do long term in the future,” he says. “We walk a very fine tightrope on what we can really do for the bulk of NZ wool.”