Merino farmers have signed $2.5 million of contracts with a Japanese wool textile maker expanding in the uniform business.
New Zealand Merino (NZM) reached an agreement with NIKKE to supply 132 tonnes of fine wool in diameters of 14.3, 15.3, 16.3, 17.3, 19.5 and 21.5 microns at prices "significantly superior" than market returns.
Chief executive John Brakenridge said the contracts developed stable and high-value markets for farmers as fine wools were flooding onto the market in Australia and the commodity outlook for fine wool prices was pessimistic.
NZM has been working closely with NIKKE in the past year to establish a new range of fabrics.
The Japanese company wanted to use their merino collection from New Zealand to cement their position among the fabric elite.
The new range of LEZEL Romance of the Regions tells the story of the main growing areas of fine wool from 12.5 to 17.5 microns throughout the South Island.
NZM Japanese market manager Mike Hargadon said NIKKE was keen for New Zealand merino to play a role beyond 6 per cent of their supply base and were prepared to invest in its success.
The Government Primary Growth Partnership programme's NZSTX project had helped with product developments and market prototypes, he said.
NIKKE said 56 schools were using its merino uniforms in a competitive school market.
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