Strong demand drives SA Wool market to new Record High

Port Elizabeth – Strong demand and a persistently weak Rand drove wool prices to a record high and the Cape Wools Merino indicator gained 4,7% to close at R140,00/kg (clean). 

This is 25,4% higher compared to the opening sale of this season and up 27,9% compared to the corresponding sale of the previous season. In the Australian market, the indicator increased by 5,0%. The Cape Wools All-Wool Indicator gained 4,6%.

Buyers reported a strong demand for and a shortage of good quality Merino wool on the day and commented on the low levels of the stockholding further along the wool processing pipeline. Seasonal supply concerns also impacted by production showing little evidence of recovery. The weaker Rand played its part in driving market prices to these new record levels.

The Rand on the day traded 1,4% weaker at R12,24 against the US dollar, compared with last

week’s average rate, and weakened 3,7% against the Euro at R13,62. The offering comprised of 6 751 bales, of which 99% was sold. Major traders were Standard Wool SA (3 354), Lempriere SA (1 476) and G Modiano SA (1 466).

The weekly price monitor sample, limited to AWEX type MF5, 70-80mm, VM<=2% wool only, experienced an average price movement as follows: 18 microns were up by 5,4% to close at R149,82/kg, 18,5 microns strengthened by 4,6% to R147,45/kg, 19 microns gained 4,3% to close at R142,30/kg, 19,5 microns rose with 5,6% to close at R142,49/kg, 20 microns gained 7,0% to close at R141,11/kg, 20,5 microns increased with 4,8% to close at R137,91/kg, 21 microns gained 4,4% to close at R136,41/kg, 21,5 microns strengthened by 4,4% to R134,70/kg and 22 microns rose by 10,1% to close at R135,04/kg.

The last sale of the season is scheduled for 10 June where approximately 10 200 bales will be on offer.