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South African wool industry on an upbeat
Jan '12
With prices of wool at record levels, South African wool industry is expecting a revival of fortunes.

The merino indicator, which is a weighted index of different types of apparel wool, had recently seen a historic high of 105.15 rands per kg.

Mohair, of which the country is the biggest global producer and also the international industry hub, is also on an upbeat.

Experts say that a decline in global wool production has been pushing wool prices up for the past few months. Such decline in production is being attributed to high prices of mutton and lamb and low wool prices a few months back, which persuaded the sheep farmers to slaughter their animals for mutton and lamb, rather than to feed them.

In the season to mid-2010, for which the figures are available, South Africa produced 48.3 million kg of greasy or unprocessed wool.

South Africa is the world's second biggest producer of apparel wool, next to Australia, and ships out around 98 percent of its total clip. New Zealand produces more wool than South Africa, but its wool is not suitable for making apparels due to its coarser nature.

However, high exports are exposing the domestic industry to global financial woes and volatility in the value of US dollar, a currency that most of the importers prefer trading in.

According to experts, South Africa's domestic wool industry needs to meticulously monitor the effects on demand due to economic instability in the eurozone.

While fashion-forward countries like Germany, France and Italy are the leading procurers of South African wool in Western Europe, China and India top the list of Asian countries. Japan and Taiwan also procure wool from South Africa, but are relatively small buyers.

China has become a large buyer of South African wool in recent years, as the Chinese Government is pumping in more and more investment for developing its labour-intensive textile industry.

China uses half of its wool imports to prepare products that are sold in its domestic market, while the remaining 50 percent is utilized by the clothing industry to produce items for exports to the US, Europe and Japan.

Fibre2fashion News Desk - India

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