‘Tide has turned’: Can Chinese demand bring hope back to Kiwi wool farmers?

Friday, 3 October 2025

Wools of New Zealand has signed a new partnership agreement with Chinese textile and manufacturer Anmao to grow demand for Kiwi wool and lift wool prices for struggling farmers, its chief executive says.

The signing ceremony with Anmao took place ahead of the 36th Nanjing Wool Market conference last month and comes after the wool sales and marketing group closed a multimillion-dollar deal with a Chinese fine wool rug maker Saibosi in June.

Chief executive John McWhirter said the supply partnership was an important step in rebuilding confidence among sheep farmers, after years of weak prices and dwindling volumes.

“It’s been pretty tough for New Zealand sheep farmers, and they’ve been despondent,” McWhirter told The Post.

The deal comes at a time of cautious optimism in the sector following years of low farmgate returns for crossbred wool. That had started to recover with recent auction prices for South Island wool at $4.25/kg last month, up from $3.50/kg a year ago, according to PGG Wrightson data.

Significant global shortages of all wool types had boosted demand “not seen in a generation” with buyers having to meet immediate demand in China, PGG Wrightson South Island auction manager Dave Burridge said.

“The tide has turned,” McWhirter said. “Supply and demand are now much closer to balance, maybe even favouring demand.”

“Farmers are seeing that their product is valued in these international markets.That feedback and the rising prices are helping lift sentiment. We’re not fully there yet, but the industry is on a positive trajectory.”

The Anmao partnership and other agreements with Chinese manufacturers, including Saibosi and Yangxin Ruixin, would be essential to increase demand for New Zealand wool in China, he said.

McWhirter could not confirm how much the Anmao deal was worth or how much wool was on the table, but said the company was a “significant purchaser” of New Zealand wool and would help underpin more stable, premium pricing.

Manufacturers like Anmao and Saibosi were expanding wool-based flooring and rugs in the domestic market. China accounts for 40%-50% of New Zealand strong wool exports, which are used in products ranging from carpets and rugs to bedding.

McWhirter said the partnerships ensured those manufacturers had a reliable supply of high-quality natural fibre.

“Our farmers see the opportunity to have a direct relationship that benefits them,” he said. “It’s part of a long-term strategy to improve returns for farmers by focusing on value-added products rather than commodity wool.”

Meanwhile, India was the second-largest buyer of Aotearoa wool but due to a 50% tariff on goods imported to the US, demand for international wool had slowed. India was also a major wool manufacturer but McWhirter said it “sells to itself” increasingly, keeping domestic wool in the local market, as exporting became more costly.

McWhirter said blended wool, which mixes high- and low-quality fibres, had historically depressed prices. By highlighting differences in wool types and promoting higher-value fibres, Wools of New Zealand could secure better pricing for farmers and stimulate growth in niche product categories, including felted yarns, wool tiles, and home textiles.

Wools of New Zealand was also seeing growth at home with retailers reporting 25-30% higher sales of wool carpets compared with synthetic alternatives since it launched its own wool carpet lines three years ago, he said.

Looking ahead, McWhirter said the group was still looking for more global export partnerships, with links to manufacturers in India, Turkey, Europe and the UK. He said the solid reputation for Aotearoa wool was sure to bring better demand and prices for beleaguered farmers.

“With prices rising and demand growing, we can see a better future ahead. We’re not there yet, but we’re on the journey.”