Wool softer but prospects still good

Aggressive competition among buyers at the most recent wool auction continued to fuel the positive mood in the local wool industry, according to Ken Craig of BKB. “This is perhaps the single most important intangible factor we have with which to measure the perception of wool buyers as a group.
Issue Date: 12 October 2007

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Aggressive competition among buyers at the most recent wool auction continued to fuel the positive mood in the local wool industry, according to Ken Craig of BKB. “This is perhaps the single most important intangible factor we have with which to measure the perception of wool buyers as a group.

After all, they are supposed to have their fingers on the pulse of the international wool market, and the mood on the auction floor determines the current health or prospective prosperity of the industry at any particular point. This mood has been positive for the better part of a year. But we all know this can change overnight,” he told Farmer’s Weekly. Craig warned that the debt crisis in the US would affect consumer buying power, which will ultimately affect wool prices. “However, the dwindling supply in Australia, due to the prolonged drought, is likely to counter any price discount. As always, the market is likely to be affected by the US dollar, but the rand has stabilised significantly,” he said. Johan Louw of Cape Mohair and Wool, on the other hand, felt that international optimism on global equity, due to interest rate changes, would lead to improved consumer sentiment and stronger demand.

“While the Australian market, also influenced by US interest rates, experienced a slight downward trend too, good-quality wool of all micron ranges realised good prices in Port Elizabeth. The forecast remains upbeat in a situation where supply is not meeting demand. Processors are really worried about the low supply in Australia in comparison with the previous season,” he said.

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O na Viljoen of Cape Wools said the market had softened slightly after the previous sale’s surge, mainly as a result of the stronger rand, and the Merino indicator closed the day down 1,2% at R56/kg (clean). The rand, buoyed by the firm euro, was trading at its best levels since June. Most micron categories sold at lower prices. verage price movements for AWEX-type fleeces MF3, MF4 and MF5 of 70mm and 80mm were as follows: 19 microns were 0,7% cheaper at R67,23/kg; 20 microns were down 2,6% at R59,81/kg; 21 microns were down 1,1% to R56,47/kg; and 22 microns were down 2% at R54,73/kg. There were insufficient quantities of 23, 24 and 25 microns in these style and length categories to quote. Of the 8 514 bales on offer, 98% were sold. – Roelof Bezuidenhout