Weaker rand boosts wool

The local wool market edged higher due to A SOFTER currency and the return of the Chinese to the market after their New Year celebrations. Prices for good-quality wool again achieved good prices as a result of the big offering of poorer-quality wool in Australia due to the prolonged drought, said Johan Louw of Cape Mohair and Wool.
Issue Date 16 March 2007

The local wool market edged higher due to A SOFTER currency and the return of the Chinese to the market after their New Year celebrations. Prices for good-quality wool again achieved good prices as a result of the big offering of poorer-quality wool in Australia due to the prolonged drought, said Johan Louw of Cape Mohair and Wool.

K en Craig of BKB said the market indicator is currently 53% higher than a year ago, while over the same period the rand has depreciated by 18% against the dollar. “The market continues to show signs of stabilising, which is just what the trade has been trying to achieve. The widening trade deficit in SA may place pressure on the currency in the short term.
However, analysts generally expect the currency to trade around current levels, adding further stability to wool prices,” he said. C ape Wools’ overall indicator gained 1,8% to R38,58/kg (clean). According to spokesperson Ona Viljoen, developing market jitters caused rand instability during a fairly small sale with only 6 457 bales on offer. Merino long fleece wools ( spinners and good topmaking styles) posted considerable gains, with 20 microns emerging as the star performer with an increase of over 4%.
Other micron categories gained between 2% and 3%. verage price movements for Australian Wool Exchange-type fleeces MF3, MF4 and MF5 of 70mm and 80mm were: 20 microns were up 4,3% at R56,27/kg; 21 microns gained 2,4% at R53,90/ kg; 22 microns were 2,7% dearer at R52,66/kg, and 23 microns rose 3,3% at R51,08/kg. There were no quotes for 19, 24 and 25 microns. Major buyers were Modiano (1 148 bales), Segard Masurel (913 bales), SA Wool Exporters (880 bales), Chargeurs (868 bales) and Stucken (829 bales). – Roelof Bezuidenhout