New Zealand's Wool Market

This country has more sheep than people: Synthetic fibers and falling wool prices could change that

New Zealand’s government works to bolster the competitiveness of the country’s world-famous wool sector, as demand grows for synthetic fibers

New Zealand’s government works to bolster the competitiveness of the country’s world-famous wool sector, as demand grows for synthetic fibers
Maite Knorr-Evans
Maite joined the AS USA in 2021, bringing her experience as a research analyst investigating illegal logging to the team. Maite’s interest in politics propelled her to pursue a degree in international relations and a master's in political philosophy. At AS USA, Maite combines her knowledge of political economy and personal finance to empower readers by providing answers to their most pressing questions.
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A popular trivia question about New Zealand could be thrown out as the country’s demographics could soon make it untrue. New Zealand has long been known as a country home to more sheep than humans, but that is changing, as the human population grows and that of their wolly friends shrinks.

It may still be several decades before the human population in New Zealand surpasses its sheep population. Current statistics reveal that there are roughly 4.5 sheep for every resident in the country. This figure marks a significant decline from the 1980s, when the ratio was a staggering 22 sheep per person, according to the Associated Press. During that era, New Zealand boasted a population of about 3.2 million people. Today, the island nation’s population has grown to approximately 5.2 million.

This country has more sheep than people: Synthetic fibers and falling wool prices could change that
Photo by Ali Atmaca/Anadolu Agency/Getty Images

What accounts for the dramatic decrease in New Zealand’s sheep population, which has fallen from more than 70 million to just 22 million? The primary reason is the diversification of New Zealand’s economy, which now relies far less on wool exports.

In April, the government issued a press release outlining its forward-looking perspective on the future of this critical sector. The government highlighted that New Zealand produces approximately 9 percent of the world’s wool and remains the leading producer, followed by China and Australia.

Supporting the NZ wool industry is a key part of the positive steps the Government is taking to add value to the economy,” stated Mark Patterson, the Minister for Rural Communities. The government is facing up to the challenges the sector has faced, as it competes with “synthetic fibres in global markets and a decline in both sheep numbers and the volume of wool produced.”

Global demand for wool is expected to increase in the coming years

In 2023, the market research group, Grand Review, projected a continued increase in the demand for woolen textiles, pointing to “awareness of environmental concerns rises,” on the part of consumers, who have shown a preference for “sustainable and natural fibers.”

Wool products are trusted for their durability and warmth, and though they may have a higher price point than similar products made from synthetic fibers, with wool, many consumers feel that they get what they pay for. However, as New Zealand faces competition from other countries, the government is keen to support the industry and ensure it can stay competitive.

Patterson noted that the industry had faced stiff competition in recent years, specifically highlighting the prevalence of “synthetic fibres in global markets and a decline in both sheep numbers and the volume of wool produced.”

New procurement rules to support New Zealand’s wool sector

To bolster demand for wool domestically, the government announced that it would be updating its procurement rules when it comes to construction, explained Economic Growth Minister Nicola Willis.

Later this year, the “use of woolen fibre products” will be made a requirement, where possible, in construction and the updating of government buildings.

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The move delivers on a New Zealand First and National Party coalition agreement to preference the use of woollen fibres in government buildings,” said Willis. The leaders hope that these requirements will spur innovation in the sector, as new building materials are developed and improved, while also boosting employment in the country.

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