Mitigating the impact of Lesotho’s wool woes on SA industry

Mitigating the impact of Lesotho’s wool woes on SA industry
Role players in the local wool industry are already putting plans in place to try and make up the for lower volumes in the market, due to wool from Lesotho no longer being sold at South African auctions.
Photo: FW Archive

General manager of wool and mohair at BKB, Isak Staats, said the Lesotho clip usually amounted to about 4,5 million kilogram per year, and in the past, producers would have already delivered between 2 million kilogram and 2,7 million kilogram by this time of the year.

In addition to the financial impact, Staats said economies of scale would also be affected across the board. “Your unit costs just become that much more expensive.”

The Agricultural Marketing (Wool and Mohair Licensing) Regulations of 2018, which were gazetted in  Lesotho earlier this year, states that no one is permitted to trade in wool and mohair without a licence obtained from the Ministry of Small Business, Cooperatives and Marketing in that country.

A new auction venue, the Lesotho Wool Centre, has since been officially opened in Thaba-Bosiu.

Staats said BKB would continue to monitor the situation in Lesotho and provide support to clients where possible, but he said the reality was that Lesotho was a sovereign nation and BKB could not interfere in that country’s internal matters. He said while BKB had registered a company in Lesotho, it remained very difficult to try and conduct any business there as there was no policy certainty.

The company would also be looking into ways to make operations in South Africa more cost-effective. “Even if some of [the Lesotho clip] does come back to South Africa I don’t think it will ever [return to what it was before] so this is a long-term change,” he said.

The general manager of South Africa’s National Wool Growers’ Association, Leon de Beer, expressed the organisations concern about the plight of producers in Lesotho. He also questioned whether wool offered for sale in Lesotho would undergo the necessary testing by an internationally recognised body such as South Africa’s Wool Testing Bureau.

Staats said he could say “without a doubt” that the Lesotho wool was not being tested. This was also confirmed in a court application brought by wool producers in Lesotho earlier this year to prevent the introduction of the regulations.