This week the wool market showed an increase to the previous auction. The Cape Wools Merino Indicator recorded an increase of 2.6% and ended 450 points higher on R177.14. The increase is in contrast with the Australian EMI which declined by 0.5%. The increase can be attributed mainly to the decline of the rand against most of the major currencies and showed 3% weaker against the US Dollar. Competition amongst buyers were healthy though, with Standard Wool who purchased the highest quantity of bales. Wools of 20 – 21.5 microns showed the highest increase of between 3.5 and 4%. Fine wools of under 17 microns still traded at high prices. The highest price on the OVK auction of this week, was achieved by a 1 bale lot BFFY of 16.5 microns, out of the clip of Kareekrans Supers of Somerset East. The buyer was Standard Wool. Congratulations on the excellent achievement!
This week’s wool auction showed an increase to the one prior to the Easter recess. What makes this more positive though, is the fact that it is in contrast with the Australian EMI, the world’s most prominent indicator, which showed a decline of 0.5%. Although it is a diametrically result of the strength of Rand, which declined by a mere 3%, it is still positive, because it shows a stable demand. The quantity of wool, according to the same period PY, is still about 8% lower though and that is mainly caused by the pressing draught, which harassed huge parts of production areas and still ongoing in some areas, mainly in the western parts of the country. The Chinese market absorbs +/- 70% of the global wool production and is therefore the leading price indicator. For that reason the market is in high expectation of what the coming winter fashion in China is going to direct in terms of textile preference. Although it is still 8 months away, fashion houses are already in planning phases. The past season Chinese fashion trended strongly towards natural fibers and that showed in the higher wool price. It the same trend follows, wool prices should stay accordingly positive and might even show further increase. The next wool auction will take place on 18 April 2018, where +/- 7330 bales will be on offer.
This report by Heinrich Victor, Operational Manager Fiber – OVK.
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