By Charné Kemp
At the last wool auction of the past summer season – while the exchange rate increased from R17.71 to R17.81 – a large supply of 11 618 bales was made. Still, the competition among buyers of good style and longer lengths was tough.
According to the Cape Wools market report, wool of different lengths was offered, with 67% of the supply consisting of finer micron wool. Certified sustainable wool made up 60.7% of the supply. Some 96% of the longer-length wool fleece was sold.
The Merino index remained unchanged at R173/kg, while prices for certified wool increased by 0.3% to R177/kg.
The highest price of R254/kg (clean) was paid for a single bale of 15.3 micron wool.
The Australian market was slightly weaker at 0.1% but still showed positive results despite the strong dollar. This was an improvement on the previous week’s sales.
Isak Staats, BKB’s general manager, says the wool market has remained relatively constant over the past season.
“Wool prices are far behind compared to the inflation rate. One good thing is that the premium for certified sustainable wool is from 8% to 10%. Overseas buyers and customers know they can only get this quality wool in South Africa, hence the good demand.”
The South African market has a competitive advantage in a wool market that is generally sluggish.
“We are grateful that wool prices are doing well compared to cotton and other natural fibres. The problem is that there is too much fibre available worldwide, and the First World remains under economic pressure. The Chinese economy is also slow, and there is not enough demand to absorb our products.”
He says the good news is that the climate this year has been very good for wool farmers.
“In addition, meat prices have been very good in recent months, and this encourages sheep farmers to keep farming. Meat usually provides from 70% to 80% of sheep farmers’ income. Although there are fewer wool farmers, production is constant. This means that the remaining wool farmers produce more.”
The largest buyers at the auction were Standard Wool (3 089 bales), BKB Pinnacle Fibres (2 161 bales), and Modiano SA (1 857 bales). Of the 6 340 bales offered by BKB, 6 236 (98%) were sold.
H.J. Beukes of Ermelo achieved the three highest prices for his certified sustainable wool at the BKB auction. His 15.3 micron wool with a tensile strength of 38 achieved R202/kg, and his 15.8 micron bales with a tensile strength of 40 and 15.5 micron wool with a tensile strength of 36 were sold at R199/kg.
According to the OVK report, the South African wool market closed the last auction on a steady note.
There was a high sales percentage and a stable indicator, supported by a strong demand for longer-length Merino wool.
According to OVK, they offered 3 373 bales, 99.82% of which were sold. The highest price of R157.20/kg (with a clean price of R197.80/kg) was obtained for a single bale, lot BFY of 18.6 microns, from E.P. Klopper of Adelaide’s wool fleece. The buyer was G Modiano SA.
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Wool value chain looking promising again after difficult five years
