Wool prices drop sharply (South Africa)

Wool prices dropped sharply at this week's sale and Cape Wools' Merino indicator shed 6.8% to close at R60.82/kg (clean). Although the Australian market was also down, local prices dropped more sharply. The uncertainty regarding Rift Valley Fever (RVF) and the problems in obtaining health certificate s for exporting grease wool to China may have been a contributing factor.

Although the Directorate Animal Health of the Department of Agriculture, Forestry and Fisheries is in the process of declaring South Africa free of RVF according to the World Organisation for Animal Health (OIE) protocols, there is a 12-month moratorium on the issuing of health certificates for grease-wool exportation to China.

The drop in prices also coincided with the lowest clearance rate t his season. Only 88% of the 11 500 bales on offer was sold. The rand, at R7.00, was a marginal 0.3% up against the US dollar, whil e it had appreciated by 2.8% against the Euro at R9.17.

Major buyers were Standard Wool SA (3 724 bales), Modiano SA (1 80 3 bales), Stucken (1 710 bales), and Lempriere (1 689 bales). Prices for long fine wools of 19 micron and finer were relatively stable and improved by 1.4%. A fresh record price of R100/kg (greasy) was obtained for one bale MF280 of 15.8 microns offered by Stuart Dewing from the farm Highlands in the Cathcart district.

He was the winner of the 2009/10 Zegna fine -wool competition.

Average prices for good top -making (MF5), sound, long fleeces (less than 1% seed content) were as follows: 19 microns gained 1.4% to R88.53/kg; 20 microns were 7.7% cheaper at R63.69/kg; 21 microns were down by 7.2% to R61.14/kg, and 22 microns shed 7.2% to close at R58.02/kg.

Approximately 11 500 bales will be offered next week's sale, which is the final sale before the Christmas recess.

source:Cape Wools SA