I don’t think that there are any specific blockages impairing the popularity of South African wool, but with China being such a major buyer of wool, the distance to China might be a bit of a disadvantage for South African wool. The most significant factor hampering the growth of wool production in South Africa I think are the losses that growers suffer as a result of predators killing their lambs. These losses have been increasing steadily and the reduction of these losses is a huge challenge facing the industry. As far as the growth of wool consumption in general is concern I don’t think that we have been doing enough promotion of woolen products in the recent past. This seems to be changing and South Africa intends to lift its level of spending on promotion to help correct this.

The world recession caused the price of wool to drop by 50%. As you can imagine this is devastating to the income of wool growers. Fortunately most of the growers see this as a phase that we all have to get through, and so there does not seem to be a significant swing from wool growing as a result of the poor prices. The fact that there has been some recovery in the price of wool has also helped keep growers positive about the longer term prospects of the wool price. The wool industry does not get much government support so there is not anything specific that the South African government has done to alleviate the plight of the wool industry.

Through the production advisory service Cape Wools is continuing to look for ways of improving the efficiency of wool growing in South Africa in an attempt to mitigate some of the effects of the recession. At the same time we are also keeping the growers informed of the reduction in production in other apparel wool growing countries so that they realize that when demand returns to normal than there will be significant upward pressure on the price of wool.

Fortunately in the early part of the global financial crisis in late 2008 when the wool price was at its lowest the South African rand weakened and as a result the drop in rand price of wool was cushioned slightly. Since then, as you mentioned, the rand has shown great strength which is obviously not good for South African exporters. Although no one wants a weak rand we as wool grower would not mind if it was slightly weaker.

Yes, I think there will be a benefit for our industry but that benefit would have been a lot more if 2009 was not such a poor retail year in so many of our consumer countries. As such it will be difficult to determine how much the wool industry will benefit from the initiative. As I said earlier I think that consumer awareness about the wonderful properties of wool needs to be raised and any initiative that contributes to this is a good thing. Wool growing is also a very environmentally sustainable practice and we hope that the year of the natural fiber will help raise consumer awareness of this.

You're welcome!

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