Wool highest in four years

A weak currency and keen demand pushed wool prices to their highest levels in four years, with the Cape Wools market indicator rising 4,8% to close at R41,90/kg clean.
Issue Date: 30 March 2007

A weak currency and keen demand pushed wool prices to their highest levels in four years, with the Cape Wools market indicator rising 4,8% to close at R41,90/kg clean. “This is up 39% on the opening level,” said spokesperson Ona Viljoen. She said shorter, finer, quality Merino wools of 40mm to 50mm fetched excellent prices, while the biggest increases could be seen in the 22 and 23 micron categories, which rose between 7% and 8%.

The rand, with other emerging market currencies, lost ground to the major currencies, while local prices followed the trend in Australia where the indicator was up 2,2%. ”We can thank increasing international concern about the availability of particularly good-quality wool for the increase, although the price of inferior types rose moderately,” said Johan Louw of Cape Mohair and Wools, adding the effect of the drought in Australia on the availability of good-quality wool will probably continue up to the end of this season and beyond. “Growers are expressing humble appreciation for current wool price levels, and indicate that current price levels are favourable to the well-being of Merino wool farming practices,” said Ken Craig of BKB.

He said the widening trade deficit and emerging market jitters are placing pressure on the rand, but this is expected to be for the short term only, as most analysts anticipate that the currency will trade in a band of R7,20 to R7,40 to the dollar. Average price movements for Australian Wool Exchange-type fleeces MF3, MF4 and MF5 of 70mm and 80mm were: 19 microns gained 5,7% at R67,86/kg; 20 microns were up 3,8% at R61,44/kg; 21 microns rose 5,1% at R58,75/kg; 22 microns were 7,7% dearer at R58,12/kg, 23 microns rose 6,8% at R55,85/kg. The total offering comprised 10 468 bales, 99% of which changed hands. Major buyers were Modiano (3 034 bales), SA Wool Exporters (2 355 bales), Stucken (1 384 bales), Chargeurs (1 102 bales) and Segard Masurel (1 035 bales). – Roelof Bezuidenhout