John Hargreaves' family has farmed sheep and beef in Kaiwaka, north of Auckland, for generations. In the 1960s they had 3,000 ewes, but as wool value declined and shearing costs grew, his flock shrank to just over 1,700. Now, for the first time in roughly six years, his wool is making money. “We’re now covering our shearing costs and making some sort of a profit,” Hargreaves says, presumably while doing a little jig.

New Zealand’s once-famous wool industry is showing signs of a comeback, thanks to rising costs of synthetic fabrics and a global hunger for natural fibres. The country’s sheep population peaked at over 70 million in the 1980s - about 22 sheep per human - but now stands at just over 23 million, or 4.5 sheep per human, according to StatsNZ. The decline was driven by 1980s economic policies and the allure of synthetics, not to mention farmers converting pasture into forestry and dairy.

But Dave Burridge, national wool auction manager for PGG Wrightson, says tight global wool supply and rising oil prices - fueled by the Middle East conflict - are pushing up demand for wool. “The raw material used to produce nylon and polyester fibres, they’ve all gone up in price,” pushing buyers from China and India towards natural fibres. Major brands are also sniffing around: Chanel invested in Central Otago’s Lammermoor Station in April, Patagonia visited in June, and Turkish carpet maker Kalida Hali struck a deal with Wools of New Zealand in May.

In June, wool fetched its highest prices in 15 years at the PGG Wrightson national auction - ranging from NZ$6.47 to NZ$6.80 per kilogram for crossbred fleeces, with top-quality ones reaching nearly $8. But there’s still volatility: prices dipped at the most recent auction in Christchurch on 30 July, partly because buyers had already filled commitments. Burridge calls the dip unsurprising, noting “there was always quiet concern … that the price had gone up very quickly, like unparalleled rises … and that things were going to probably come off at some stage.” Still, prices are up $2 on a year ago, and Burridge is “really excited about the long-term prospects for wool."

Richard Dawkins, Federated Farmers' wool and meat manager, says strong prices have buoyed farmers, and there's cautious optimism. Demand is rising in India, New Zealand’s second-largest wool market, and a recent trade deal will eliminate tariffs on wool. Dawkins adds that New Zealand’s culture needs to re-embrace wool: “This nation was built off the back of a sheep, built off wool … and that story’s been lost over the decades. It’s one thing asking the world to buy our product, but we need to embrace it ourselves as well.” So go ahead, New Zealand - wrap yourself in a woolly hug.