Absence of wool from Lesotho hits local market
The Cape Wools indicator increased 146 points to close at R206,14/kg (clean) at the second sale of November, while the Australian EMI declined for three weeks in a row.
Market demand was unchanged, with long and fine Merino wool still in high demand, but receipts at broker stores were 39% down compared with the previous season, partly due to the absence of wool from Lesotho.
The rand was 2,9% down against the US dollar and 1,2% lower against the euro at the time of the sale, compared with exchange rate levels during the previous sale, according to Heinrich Victor, operational manager of fibre at OVK. In South Africa, wool supplies at brokers’ stores were still much lower week-on-week and accumulated stocks were 12,15% lower than for the 2017/2018 season. The largest price increase of up to 1,8%, was achieved for the 19-micron and 22-micron segments. The best price of R187/kg was achieved for a bale of 17,3 microns in a BH lot from the clip of Hampton Farms of Cathcart. The buyer was New England.
According to Australian Wool Innovation, October was generally a quieter month in the cycle, as manufacturers and brands awaited sales data from retail stores for the new autumn/winter season, before deciding on any new orders.
In addition, the drought in Australia had had a significant impact on the market, particularly for China, as the bulk of Chinese wool purchases fell in the 19-micron to 21-micron range, or the “bread and butter” wool types for Chinese mills, as these wool types were often used in the manufacture of official uniforms in that country.
As a result of the drought, a large proportion of Australian producers who normally delivered fleeces of 19 micron to 21 micron had been producing fleeces of 16 micron to 18 micron.
These wool types fell outside the traditional specifications for many Chinese mills. Research showed an increase of around 70% to 80% in the production of 16-micron to 17-micron wool over the past 12 months. – Roelof Bezuidenhout