Wool prices soften in African market

10 May '12

2 min read

Wool prices softened at this week's sale as the volume of orders from China and Europe are tapering off and Cape Wools' Merino indicator shed 1% compared with the previous sale a fortnight ago to close at R98.11/kg (clean).

Competition decreased as a result of decreased demand in China's export markets, while China's domestic demand is slightly weaker.

Demand for long quality fleeces remained relatively firm but prices were down on the previous week.

The rand weakened as investors are fleeing to safety in the US dollar and had depreciated by 2.2% against the greenback compared with the average rate at the previous sale, trading at R7.89, while it was a marginal 0.4% down against the euro at R10,23.

This week's offering comprised 7 715 bales of which 96% was cleared. Major buyers were Standard Wool SA (2 343 bales), Lempriere SA (2 104 bales), Modiano SA (1 028 bales) and Stucken & Co (1 026 bales).

The average clean prices for the different categories good top-making (MF5), long fleeces were as follows: 18 microns were 1% down at R112.96/kg, 18.5 microns dropped 1.1% to R112,58/kg, 19 microns were 2.5% cheaper at R110.93/kg, 19,5 microns were down a marginal 0.2% to R108.59/kg, 20 microns shed 1.6% to close at R105.30/kg, 20.5 microns were down 0,8% at R104.82/kg, 21 microns dropped 1.8% to close at R102.87/kg and 21.5 microns were a slight 0.2% dearer at R103.21/kg. There were no quotes for 22 microns.

No sale has been scheduled for next week. Sales will resume on 23 May, the penultimate sale, when approximately 6 000 bales will be offered.

Cape Wools

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