Weak rand supports wool market

02 Oct '08

2 min read

The market put up a solid performance at this week's sale amid the uncertainty in global markets and Cape Wools' Merino indicator gained 1.5% on last week to close at R54.30/kg (clean).

This increase can be ascribed partly to the exchange rate, which saw the rand weakening by 3.2% against the US dollar compared with the average rate at last week's sale, trading at R8.23 today. However, at R11.64, it was 1.1% stronger against the euro.

Supply concerns may also have supported the market. Receipts into brokers' stores are down 7.2% year-on-year. Possible causes for the lower receipts are the longer than normal rainy season in the Western Cape, which delayed shearing by three to four weeks, and lower fleece weights in areas affected by the drought.

The average prices of good quality long wools were up by between 1% and 2%. Long fine wools were up almost 3%.

The offering comprised 6 236 bales of which 94% was sold. Major buyers were Standard Wool SA (1 277 bales); Modiano (1 164 bales); Segard Masurel (1 086 bales), and Stucken (948 bales).

Average price movements for AWEX-type fleeces MF4 and MF5 of 70 and 80 mm were as follows: 19 microns strengthened 2.9% to R71.66/kg, 20 microns were up 1.5% at R59.09/kg; 21 microns gained 1.2% at R54.79/kg; 22 microns rose 2.5% to R53.67/kg, and 23 microns were 1.8% dearer at R52.68/kg. There were no quotes for 24 and 25 microns.

Approximately 8 000 bales will come under the hammer at next week's sale.

Capewools

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