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China is emerging as the key to move the New Zealand strong wool sector away from trading wool as a commodity, but first the sector must adjust to market signals, sector leaders say.  

“Industry needs to look at the current situation and take it as an opportunity to get higher sustainable prices for the long term.

“We don’t want rapid peaks and troughs; we want steady pricing in the markets where we are meeting what the market demands,” Wool Impact chief executive Andy Caughey said. He was part of the NZ wool contingent that attended the Nanjing Wool Congress in China.    

“From a grower’s perspective the current upward-trending pricing is encouraging, but it’s also time as a sector that we change the way we engage with the markets and, ultimately, consumers to get a better, sustainable return.

“We need to trade based on relationships and what makes the product special over and above a commodity market.

“The market can give signals and it’s up to us to be responsive and I think all of these things – carbon traceability, transparency – the brands are saying that these are what they are after, so it’s up to us to present to them what we can do.”

There are initiatives underway that will help support growers in presenting their wool to market, but it will require growers to take different steps; it’s not just going to happen. 

“Growers will have to adopt advanced accreditations and it also means better clip preparation, because when we’ve had low prices there has been a tendency to not prepare the clip as well and if we’re wanting to preserve our premium and positioning in the market, we need improved clip preparation.

“The Chinese love NZ wool, we heard that very clearly, but we do need to acknowledge that we can improve the classing and grading.”

There’s a growing sense of awareness around indoor air pollution and the need to bring sustainable materials to buildings to address the issues around microplastics, chemicals and toxins.

“There’s a clear message around sustainability, human health and environmental impact. 

“This is an opportunity for positioning wool long term. The theme is we’ve got reasons to be optimistic. 

“In the short term we are seeing a supply issue which is giving a lift now, but it’s also giving us an opportunity to pivot the way that we work and engage with the brands so that we can look at long-term sustainable pricing and returns to growers.”

National Council of NZ Wool Interests chair Rosstan Mazey said China appreciates the challenge around wool supply volume going forward and is committing to increased pricing over the long term.

“They know that this ensures that they not only get access to the fibre this year, but that they’re keeping farmers motivated to stay in sheep and to stay in wool.”

Also part of the NZ contingent in Nanjing, Associate Agriculture Minister Mark Patterson said 40% of NZ wool is traded through this Chinese city, and it was important to take the temperature of the international wool trade.

Mazey said you can’t underestimate the power of government and ministerial engagement with the Chinese.

“People were drawn to him, not only because he’s a minister of government, but also because he’s a sheep and beef farmer, someone who farms and grows the fibre that they want.”