Big jump in wool prices

07 May '09

2 min read

This week's auction sale saw a significant improvement in prices despite a strong currency and Cape Wools' Merino indicator gained 5.1% compared with the previous sale two weeks ago, to close at R49.10/kg (clean).

This increase follows the 7% hike in the Australian indicator during the past two weeks. Analysts say the higher prices indicate improved demand rather than currency fluctuations, based on improvements in the US dollar prices currently being experienced. Low stocks and supply concerns are key factors in the market.

The rand has become the top performing currency this year after recently appreciating by 15% to R8.26 against the US dollar. During the course of the sale it traded at an average rate of R8.47 to the dollar, in increase of 6.5% compared with the previous sale. At R11.26, the rand was 3.9% stronger against the euro.

With only two more sales remaining before the close of the season, competition between the various sectors of the trade was strong, lending good support to the market. Long fleece wools (70 mm and longer) were in keen demand, gaining up to 6%.

A total of 10 318 bales was offered, of which 99% changed hands. Major buyers were Modiano (2 832 bales); Standard Wool SA (2363 bales); Lempriere SA (1564 bales); Stucken (1503 bales), and Segard Masurel (811 bales).

Average prices for AWEX types MF4 and MF5 (70 mm) were as follows: 19 microns were up 2.2% at R62,42/kg; 20 microns gained 2.7% to R52.21/kg; 21 microns were 5.1% dearer at R49.11/kg, and 22 microns rose 6.1% to R49.34/kg.

There will be no sale next week. Sales will resume on 20 May when approximately 10 000 bales will be offered.

Capewools

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