New Zealand lamb wool prices jumped to their highest level in almost four years at auction yesterday on increased demand for the apparel fibre.

Lamb wool rose 3 percent to an average $6.55 per kilogram from last week's auction, the highest price since April 2011, according to AgriHQ. The average price for 35-micron wool, a benchmark for crossbred wool used for carpets and accounting for the majority of New Zealand's production, rose 1 percent to a $5.15/kg. The amount of wool offered for auction in the North and South Islands was down about a third to 14,000 bales from the previous combined auction.

New Zealand lamb wool prices have been steadily increasing so far this year, outpacing demand for other wool types. China is the largest buyer of New Zealand wool, accounting for 52 percent of the nation's $794 million in wool exports last year, according to Statistics NZ data.

"There has been high demand for lamb wool and the finer crossbred types and that is helping to push those prices higher," said AgriHQ agriculture analyst Ivan Luketina. "Some buying pressure has been added after buyers that sat out of earlier auctions in anticipation of continued declines in price are now buying back in to cover short-term requirements.

"Lamb wool is used for apparel, there has been less mid-micron and fine crossbred wool available for apparel in the past few months so the price pressure is going on to lamb wool," Luketina said. "Most of the demand is from China, but the finished product is unlikely to end up there. China will export the apparel out to other areas such as Europe and the US."

Italy is the second-largest buyer of New Zealand wool, taking 8.7 percent of the exported fibre last year, followed by the UK on 6.4 percent. Wool is New Zealand's 14th largest commodity export.

The latest auctions were held a day earlier than normal because of the Waitangi Day public holiday tomorrow.