South Africa : Economic Uncertainties Likely To Hit SA Wool Exports

Wool prices are set for a volatile year as global economic uncertainty puts a damper on export sales. Prices were up 2% to R46,64/kg for clean wool in the first wool auction of the year, said industry body, Cape Wools.

However, wool prices are expected to fall as export demand declines because of poor economic growth in importing countries. SA's largest export market for wool is the European Union, with Italy importing 24,8% and France importing 23,1% of SA wool last season.

Buyers said the fluctuating currency was also making trading difficult. The stronger rand is expected to hurt export demand, which benefited from the depressed currency last year.

Cape Wools said yesterday an auction this week saw 2000 more bales of wool up for sale, at a total of 10015 bales, while 13000 bales will be auctioned next week.

Wool exports benefited from the weaker rand last year, earning R1,1bn in export revenue in the 2001/02 season.