Estimated reading time: 2 minutes
The opening of China to South African wool was very well received by all the role players in the industry. Unfortunately, due to the non-shipment of wool for four months, the industry has lost its allocations on the existing shipping trade servicing South Africa.
This caused more than 400 containers, which translates into approximately 64 000 bales, to be stuck in the ports and broker warehouses. Consequently, the local shipping lines are doing everything in their power to reclaim these allocations.
China lifts ban on South African wool imports
At a recent meeting, role-players in the wool industry decided that there will only be two auctions in September – one on the 14th and another on the 28th. This decision was made with clearing the backlog and soundly marketing the South African clip in mind. The industry is in constant communication with the shipping lines to try and move the backlog as soon as possible. This will be reviewed weekly.
Unfortunately, the ongoing inefficiency in the South African ports only exacerbates the situation. The South African market is fortunate as an industry to have some of the best and most sustainably certified Merino wool in the world, which always ensures demand. However, the Chinese market forms the largest market for our product.
On the positive side, the industry may start receiving higher allocations on the incoming vessels in October this year. Yet, it must be understood that because the industry is only allocated a certain number of containers per week, auctions may have to be limited to ensure that what is bought can be shipped.
Update on the latest wool auction
The 2022/23 wool season continued this week, with the third sale of the season taking place in Port Elizabeth.
A total of 7 471 bales were on offer, with a lower overall sales clearance of 84,2%. More than half of the offering consisted of fine micron long wools, with 67% of the Merino wools on offer being certified as sustainable.
The shipping vessel shortage caused the market to experience downward pressure at this week’s sale.
The non‑Responsible Wool Standard (RWS) indicator eased by 3,6% to close at R160,22/kg and the RWS indicator decreased by 6,3%, to close at R172,22/kg.
The Australian market also experienced downward pressure this week and closed 0,9% down from the previous sale in Australian dollar terms.
The major buyers at this week’s sale were Modiano SA (1 940), Lempriere SA (1 425), Stucken & Co (1 001) and Standard Wool SA (959). – Press release, Cape Wools SA