This article follows on from recent articles looking at the Argentine and South African Merino clips, by taking a close look at the New Zealand Merino clip.
The New Zealand Merino clip is only a small component of the overall Kiwi wool clip but is of importance in this world of reduced Merino supply and very limited non-mulesed Merino supply. The New Zealand Wool Testing Authority (NZWTA), provides graphical details of the component of the Merino clip it tests.
As a region, New Zealand (really the South Island) produces around 60,000 bales of Merino wool annually, which is on par with the Northern Tablelands/New England of NSW (plus Traprock). In terms of fibre diameter, New Zealand is finer than the New England and Tasmania regions, averaging around 17.1-17.2 microns. In terms of staple strength, it is on par with the New England, which is high for the rest of Australia.
From a whole Merino clip perspective, the New Zealand Merino clip sits in the 4% to 6% range of the Australian Merino clip by volume. Figure 1 compares the outright volumes of the two clips by micron category for last season. The New Zealand data is a combination of fine wool exports (brought forward one month to help bring more into line with sales) and the distribution of micron as shown in the NZWTA graphics, checked against the New Zealand Merino wool sold in Australia. It is not quite the comparison of apples with apples, but close enough for our purposes.
In Figure 2 the micron distributions of the New Zealand and Australian Merino clips for last season are shown. The finer nature of the New Zealand clip stands out.
Figure 3 expresses the New Zealand Merino clip by micron category as a proportion of the Australian Merino clip, for last season and for the 2011-12 season, a decade earlier. This is where the comparison becomes interesting. For 18 micron and broader, the New Zealand Merino clip ranges from small to non-existent. However for 17 micron and finer, the New Zealand Merino clip rises from substantial to parity. Changes in the finer Merino categories of the New Zealand clip will have a material impact on this section of the market.
Finally, in Figure 4, a comparison is made of the New Zealand Merino clip and CM-NM Merino wool sold in Australia last season by micron category. Overall the New Zealand clip was 37% of the volume of CM-NM Merino wool sold in Australia. New Zealand volumes were around half of the Australian 18 micron CM-NM wool, rising to 61% for 17 micron, 67% for 16 micron, 91% for 15 micron and somewhere around double for sub-15 micron volumes (although these numbers at the very fine end of the distribution need to be treated with caution due to the assumptions made in the estimation the New Zealand clip).
What does it mean?
Change in supply is a big driver of fine micron premiums, so by rights, we should include New Zealand volumes in such calculations as they have a substantial supply of these categories. When consideration of non-mulesed status is added, the importance of the New Zealand Merino supply increases further still.
Key Points
- The New Zealand Merino clip is around 4% to 6% of the size of the Australian Merino clip.
- A fairer way of thinking about the New Zealand clip is to envisage it as a second New England region (where they play rugby union better).
- When viewed by micron category, the New Zealand Merino clip is important for the finer microns and this becomes even more so when non-mulesing is taken into account.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: ICS, Mecardo
