Static wool output can help the market

Firmer rand, and a technical correction to bring local prices more in line with Australia, pushed prices down at this week’s wool sale. Cape Wools’ Ona Viljoen said the company’s Merino indicator dropped 6,8% to close at R64,76/ kg (clean). “The Australian indicator shed 2,2% after the dollar reached a fresh high against the US dollar,” said Viljoen. “Prices for all micron categories were down, with medium to stronger wools down over 7%.” Market influences James de Jager of Cape Mohair and Wool (CMW) said the sale enjoyed good competition among local processors and greasy-wool exporters and, in spite of the softer market, good quality is still in demand. But lower qualities were under tremendous pressure. D e Jager believes the static wool output in South Africa, and the 6% decline in Australia’s production, should help the demand for apparel wool. “Wool production in many countries is under pressure to make way for profitable cropping,” explained De Jager. “With this in mind, together with the 10-year-high cotton prices and the high price of crude oil, the outlook for the near future seems promising. Mulesing on sheep is a contentious issue in manufacturing, but fortunately not a factor in SA. More and more enquiries from Europe and Asian countries are surfacing for South African wool.” ccording to De Jager the average accumulated CMW price premium, compared to the national average for the 2007/08 season so far, is 3%. “highest price on this sale was for a two-bale BL lot of 16,5 micron of wool produced by LG Vermaak from Uitenhage, which sold for R69/kg,” said De Jager. C ape Wool’s offering totalled 11 868 bales of which 96% was sold. Major buyers were Modiano (2 980 bales); Standard Wool SA (2 135 bales); Stucken (1 896 bales); and Chargeurs (1 747 bales). verage price movements for AWEX-type fleeces, MF4 and MF5 of 70mm and 80mm were as follows: 19 micron dropped 4,2% to R84,78/kg; 20 micron was down 8,6% at R71,37/kg; 21 micron was 7,6% cheaper at R65,63/kg; 22 micron shed 7,7% at R63,54 / kg; and 23 micron was 7,8% cheaper at R62,11/kg. There were no quotes for 24 and 25 micron due to insufficient quantities in these categories. – Roelof Bezuidenhout