The National Council of Wool Interests says that while the domestic wool processing sector is struggling because of the high price of wool, New Zealand will cash in, in the long run.

More than 40 carpet makers from throughout New Zealand have been laid off by Cavalier in the last several weeks and National Council of Wool Interests chairman Stephen Fookes, says this is a consequence of lower volumes and higher prices.

However, he says jobs will be created in other areas because of the higher returns for wool.  

"Inevitably there will be impacts on jobs if you go from producing more to less, and that’s a consequence of it. However, we believe the economy, no the country, will be strengthened substantially by moving wool into a higher bracket that leads to more return.

"I suppose you could always argue that, as a consequence of a stronger economy, there’s more jobs."

Mr Fookes says a lot of effort has gone into repositioning wool at the top end of the textile market, where it used to sit, and in the process has made the industry profitable again for farmers.

He says environmentally conscious top-end consumers are increasingly aware that wool is renewable, sustainable and takes the least energy to produce.  

"It’s a transition that I think we’ve gone through in agriculture generally in New Zealand - where we’re repositioning our produce at the higher level of the market, rather than just trying to fit into the mainstream."