Domestic Price of Wool

IBISWorld expects that the domestic price of wool will push up 3.7% during 2024-25 to 347.3 c/kg. Production volumes are expected to remain relatively stable over the year, as sheep flocks recover slightly. Demand from China, accounting for a 40% of New Zealand’s wool export, will slide as US tariffs hinder their clothing manufacturing activity. Nevertheless, strong wool prices will carry overall wool price growth, especially as demand from India ramps up. Domestic manufacturing will also encourage price growth, as wool product exports like rugs and clothes spike from a low benchmark.

The domestic price of wool is volatile and is influenced by global factors. For example, a large proportion of globally produced wool is sold to Asian textile manufacturing countries like China. New Zealand benefits from strong export demand for wool, as it is one of the world’s largest wool producers. Prices fell sharply over the two years through 2020-21 due to the COVID-19 pandemic. In addition, global exchange rates influence demand and, in turn, prices for domestic wool. For example, the depreciating New Zealand dollar has improved the competitiveness of domestic wool exports, placing upwards pressure on local wool prices.