South African wool price up despite strong currency

The eighth sale of the 2019-20 South African wool season held on 23-24 October saw the market finish 0.5% (80 points) up at R169.87 a kg clean, with the Cape Wools All Wool Indicator also closing 0.5% higher. The market improved by 2.1% in US Dollar terms. A total of 11,418 bales were on offer, of which, 95.7% were sold.

The Rand this week was 1.5% stronger against the US Dollar and 1.3% stronger against the Euro, compared with the average rate at the previous sale.

Overall, the wool market was steady despite the somewhat downward trend on the opening day of sales to follow the Australian market and ended 0.5% up from the previous sale. This was despite a stronger SA currency of 1.5% against the US Dollar. Thus, the results achieved in this sale was very encouraging taking into account the slight volatility in the market the past few weeks.

The offering consisted of some good quality longer merino wool which attracted excellent competition from the buying houses resulting in this sector outperforming the market. The shorter wools were under pressure due to the fact that there are so few short bales on offer that companies cannot make up quantities to deliver.

The major buyers were: Lempriere SA (2,961), Modiano SA (2,930), Standard Wool SA (2,461) and Tianyu SA (1,339).

The average clean prices for the selection within the different micron categories for good top-making (MF5), long fleeces were as follows: 18.0 microns increased 2.3% to close at R186.81 a kg; 18.5 microns moved 2.4% up to close at R184.35 a kg; 19 microns gained 1.6% to close at R179.45 a kg; 19.5 microns strengthened by 0.6% to close at R175.82 a kg; 20 microns was 0.8% stronger to close at R173.59 a kg; 20.5 microns won 0.8% to close at R171.01 a kg; 21.0 microns recovered 0.9% to close at R171.15 a kg; 21.5 microns tumbled by 1.5% to close at R168.09 a kg; 22 microns fell 2.8% to close at 166.14 a kg and 22.5 microns declined by 3.4% to close at R164.28 a kg.

The next sale is scheduled for 31 October 2019 where 9 524 bales is offered for sale.

Source: Cape Wools