Wool auctions to resume on Jan 12 at Port Elizabeth

11 Jan '11

2 min read

Wool sales resume on Wednesday (12 January 2011) when approximately 12,000 bales will be offered at auction in Port Elizabeth.

Market analysts are positive that the market will continue its upward trend seen last year and that demand for wool will remain strong. At the final sale before the Christmas recess, the Cape Wools Merino indicator increased by 3,7%. This was 9% higher than at the opening sale held in mid-August last year.

Some experts say the market may follow last year's trend when the market opened strongly at the first sale after Christmas.

It is also expected that the strong demand for wool, particularly for the finer types (19,5 microns and finer), will continue in view of strong buying from Italy and other European buyers.

Factors in wool's favour are good demand for natural fibres, and the decline in the international supply of apparel wool. In Australia, the world's largest producer of apparel wool, production last season declined to 343 million kg – its lowest level in 80 years. The latest forecast is for production to drop by another 2,3% to 335 million kg.

South Africa, the second largest producer of apparel wool, is one of the few wool exporting countries where production has over the past few seasons remained stable at around 48 million kg.

Analysts nevertheless caution that some volatility can be expected while exchange rates may also play a part.

Cape Wools SA

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