Global woes upset wool market

Thu, 09 Oct 2008

The South African wool market took a knock on Wednesday, during the national wool sale, despite the weaker rand.

Cape Wools' spokesperson Ona Viljoen said the company's Merino Indicator declined by 4.5 percent to finish the day at R51.84/kg (clean).

"The rand, which was extremely volatile and at times moved by as much as 10c per quote, weakened to a near six-year low against the dollar. At noon it was quoted at R9.43 to the dollar and at R12.83 to the euro."

Viljoen said during the course of Wednesday morning the rand however turned stronger against the Australian dollar, which weakened sharply, thereby affecting the competitiveness of the local market.

"This prompted a major buyer to limit his purchases to levels significantly below his normal buying pattern."

She said prices fell across the board with long Merino wools dropping four to seven percent.

Wednesday's offering comprised 7831 bales of which 90 percent were sold.

Major buyers were Standard Wool SA (2474 bales); Stucken (1424 bales), and Segard Masurel (1368 bales).

The other buying houses all bought less than 700 bales.

Viljoen said some 7000 bales would be offered on next week's sale.