Wool prices soar to fresh seasonal high (South Africa)

Wool prices posted another substantial gain at this week's sale when Cape Wools' Merino indicator rose 5.6% to a fresh seasonal high of R68.99/kg (clean). This is up 19% on the opening level and 16% higher than the same sale last season.

Continued low stocks in the wool textile pipeline and supply concerns are some of the driving forces behind the price increase. According to the latest production forecasts, world wool supplies will remain tight in the 2010/11 season.

In Australia, the indicator gained 2.5% to also reach a fresh seasonal high of 1 015 Australian cents a kilogram. The rand, at R6.81, was up by a marginal 0.4% against the US dollar. It was 2.1% stronger against the euro at R9.40.

The offering comprised 9 306 bales of which 99% was sold. Major buyers were Modiano SA (3 491 bales), Standard Wool SA (2 781 bales), Lempriere (1 084 bales), and Stucken (983 bales). Prices rose across the board, but the biggest gains were posted in the fine wool categories, with 19 microns increasing by 8%. A record price of R87/kg was paid for a bale of 17.4 microns sold by Perdeberg Boerdery.

Average prices for good top-making (MF5), sound, long fleeces (less than 1% seed content) were as follows: 19 microns increased by 8.2% to R86.78/kg; 19.5 microns gained 5.1% to close at R78.01/kg; 20 microns were 4.3% dearer at R72.37/kg; 20.5 microns rose 4% to R69.65/kg; 21 microns strengthened by 4.3% to R68.48/kg; 21.5 microns were up 4.8% at R67.49/kg and 22 microns were 3.1% dearer at R65.66/kg.

Approximately 12 000 bales will be offered at next week's sale.

source:Cape Wools SA