South African wool market softens

After a five-week rally, which saw the Cape Wools Merino indicator gaining 17%, wool prices softened at this week’s sale with the indicator shedding 3.9% to close at R100.29/kg (clean).

There were concerns that the huge hike in prices was unsustainable since it was not being driven by increased consumer demand. In Australia, the market was also weaker.

The rand, at R8.58 was a marginal 0.4% stronger against the dollar compared with last week’s average rate, and at R11.02, it had gained 1.5% against the euro.

The offering comprised 9 904 bales of which 96% was sold. Major buyers were Modiano SA (3 264 bales), Standard Wool SA (2 277 bales), Lempriere SA (1 784 bales) and Stucken & Co (1 275 bales).

Prices were down across the board with the medium wools posting the biggest decreases.

The average clean prices for the different categories good top-making (MF5), long fleeces were as follows: 18 microns dropped 2.7% to R116.32/kg, 18.5 microns were down 1.9% at R113.22/kg, 19 microns were 3.4% cheaper to close at R108,90/kg, 19,5 microns were down 4.4% to R103.96/kg, 20 microns were 4.7% cheaper at R100.18/kg, 20.5 microns dropped 3.5% to R99.30/kg, 21 microns were down 4% to R97.96/kg, 21.5 microns shed 3.5% to close at R97.27/kg, and 22 microns dropped 3.2% to close atR96.64/kg.

Approximately 10 500 bales will be offered at next week’s sale.