Expanding vistas beckon for SA wool

Current and projected prices for SA wool are some of the best in recent years, and reports indicate that the 98% of the country’s export clip is achieving better international prices than its biggest competitor, Australia.
Issue date: 23 February 2007

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A ccording to Petrus de Wet, president of the National Wool Growers’ Association (NWGA), this is despite efforts by Australian wool marketers who try to pass off wool as contaminated and of poor quality to international buyers. “We may not have 100% clean wool, but it is of a good class and is also well-packed,” De Wet told delegates at the meeting. “have put themselves at risk of having their wool prices dictated to them by China as Australia currently sends 63% of its national production to the Chinese. We have to export our wool because only 2% of our production is used here, but we are looking at negotiating with various international markets instead of putting all our eggs in one basket.”

De Wet said although wool was popular in China, growing worldwide markets also had to be explored by the local industry. To this end the industry was currently considering participating in the funding and rollout of an international wool marketing campaign to be discussed at the International Wool Trade Organisation (IWTO) in May this year. De Wet added that ex-South African Gunter Beier was likely to be the IWTO’s next president, and this could work in the local industry’s favour in terms of gaining more international market share.

De Wet said as Europe has been a traditional client for hundreds of years, had to keep its doors open to this market – especially since China is buying nearly 20% of SA’s wool. “However, one of my main concerns is the threat of a revolution in that country. Its economy is growing too quickly to remain sustainable, and I feel that the masses of very poor people in China are eventually going to rebel against the minority of rich and extremely rich there. This will throw wool markets into chaos.”

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As the largest buyer of wool, taking 21% of total production, Italy has remained a firm favourite with local wool marketers thanks to its stable economy and demand. “The Australians are still whipping us in terms of international wool market share because we don’t have any significant international structures for wool marketing like they do. It is important that we use the proposed international system through the IWTO to get an even greater demand for our products, and we need to establish our own independent wool marketing structures bases overseas to increase the profile of wool where it matters,” De Wet said.