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Wool prices rise first time in six weeks

13
Nov '08

The sharp decline in the value of the rand and keen competition gave this week's sale a welcome boost and Cape Wools' Merino indicator gained 6.5% compared with last week to close at R45,41/kg (clean).

This was the first price increase in six weeks and follows a particularly tough October, during which the indicator fell by almost 19%. The Australian market also strengthened at this week's sales.

The sale was marked by strong competition from grease-wool exporters and local processors alike for the 8 230 bales on offer.

Major buyers were Standard Wool SA (1883 bales); Segard Masurel SA (1332 bales); Lempriere (AUS) (1285 bales); Chargeurs Wool (1 269 bales); Modiano (1165 bales), and Stucken (1061 bales). A high sales percentage of 98% was achieved.

The rand was under pressure as risk aversion crept back into markets and traded sharply down against major currencies. At R10,27 it was down 6,7% against the US dollar compared with last week's exchange rate, and at R12,90 it was 4,2% weaker against the euro.

The price of all long Merino types were up. Medium wools, however, particularly 21 microns and 22 microns, gained the most and rose nearly 10% and 7% respectively.

Average price movements for good quality long (65 - 95mm) Merino fleeces (spinners' and good topmakers' styles) were as follows: 19 microns gained 2,4% to R59,84/kg; 20 micron rose 4,4% at R49,98/kg; 21 microns were 9,7% dearer at R47,39/kg and 22 microns were up 7,4% at R45,45/kg. There were no quotes for 23 microns to 25 microns.

Approximately 10000 bales will come under the hammer at next week's sale.

Cape Wools'