New Zealand’s last medium grade wool mill Timaru’s Chargeurs New Zealand, is closing with the loss of 30 jobs.
Its closure was seen as inevitable by industry observers, since the industry was facing competition from low-cost producers in China.
Wool is also a product the international market is demanding less of.
Tim Lonsdale from Wools of New Zealand says there are fundamental changes taking place in the country’s wool sector.
“We’re seeing a radical drop in production of wool as more and more farmland is converted to dairy. This is obviously having a flow-on effect on processors,” he said.
“The global industry for wool is certainly under pressure – we’re facing stiff competition from synthetic fibres.
“I suppose they could have anticipated the trend towards finer wool and perhaps geared their factory up to process that fibre.”
But for John Brakenridge from the New Zealand Merino Company, the outlook is very different.
“Sure there’s some uncertainty as a result of the global situation at the moment but the underlying demand for merino and finer wool is actually very very good,” he said.
“If wool’s going to survive in today’s market people have to invest in marketing and research and development and that’s what NZ’s merino and fine wool growers have done.
“The reason why merino growers and finer wool growers have been successful in my opinion is because they’ve been prepared to invest in marketing and research and development.”
Complaints about poor returns from sheep in recent years have often blamed the meat industry, but the low price for pelts and wool has also been to blame.
The merino industry has shown there is still a place for natural fibresbut courser wools have yet to find a niche which will bring bring the improved returns which are needed if they are to play their part in returning the sheep industry to profitability.