Wool prices softer at opening sale

Wool prices were softer at the first sale of the 2011/12 season as uncertainty in world markets as a result of the debt crisis in Europe and the US also affected the wool market.

The Cape Wools Merino indicator declined by 4.5% compared with the closing sale of the previous season in mid June this year to close at R92,02/kg (clean), which still is relatively high.

Another factor that contributed to the lower prices was the uncertainty around Rift Valley Fever and the issuing of health clearance certificates by the Department of Agriculture, Forestry and Fisheries for raw wool exports to China. Although the department and Chinese authorities have reached an agreement to reduce the waiting period, it is still unclear when the department will start issuing the certificates.

In Australia, prices have also declined since sales resumed last week. Prices softened despite a slightly weaker rand, which at R7,07, had dropped 5.6% against the US dollar compared with the average rate at the previous sale. It was 3.8% weaker against the euro at R10,18.

It was a large offering with 13 026 bales catalogued of which 86.4% was sold. Major buyers were Standard Wool SA (3 869 bales), Modiano SA (2 827 bales), Stucken & Co (2 169 bales), and Lempriere SA (1 679 bales).

The average clean price for the different categories good top-making (MF5), sound, long fleeces (less than 1% seed content) were as follows: 20,5 microns were down 5% at R97.61/kg; 21 microns dropped 7.1% to close at R94,68/kg, and 21,5 microns were 6% cheaper at R93,32/kg.

No sale has been scheduled for next week, but sales resume on 31 August when approximately 7 000 bales will be offered.