New wool season opens in Port Elizabeth
August 18, 2009 - South Africa
The new wool selling season opens on Wednesday (19 August) when approximately 13 000 bales will be on offer at auction in Port Elizabeth.
The season opens amid encouraging signs that the recession in some of wool’s major markets is coming to an end. Demand for apparel wool is expected to start improving by year end as the world economy improves and slowly gain momentum in 2010.
In Australia, where sales have already commenced, prices increased on the back of stronger demand.
Factors in wool’s favour are the good demand for natural fibres, the relative price for wool compared with competing fibres, and the decline in the international supply of apparel wool due to the continued fall in Australia’s production. Australia is the world’s largest producer of apparel wool, followed by South Africa.
Australia’s production for 2009/’10 is expected to drop to 330-million kg, which is 30-million kg less than in 2008/’09 and the lowest level in 80 years.
Another positive development is stronger economic growth in China, the world’s largest wool consumer. China is also the largest importer of South African wool and shipments to this country last season increased to record levels.
Market analysts nevertheless caution that the market will remain erratic, while exchange rates will continue to play a major part in determining price levels in the new season.