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Wool market slightly softer

5 Dec 2014

Prices declined marginally at this week's sale despite the weaker currency and the Cape Wools Merino indicator dropped 0.3% to close at R109.20/kg (clean).

This is a 2.2% decrease on the opening sale and is 6.3% down on the corresponding sale last year. On the Australian market the indicator gained 0.4%.

Local traders say the fall in commodity prices is affecting the wool market.

According to the Financial Times, falling commodity prices reveal mounting concern about China's attempts to curb unsustainably high rates of credit creation. The large offerings in Australia and South Africa are placing additional downward pressure on prices.

The rand has depreciated by 1.7% against the US dollar compared with the average rate at the previous sale, trading at R11.13 while it was 0.9% weaker against the Euro at R13.80.

The offering comprised of 13,123 bales of which 96% was cleared to the trade. The most active traders were Lempriere SA (4,203), Standard Wool SA (3,067), G Modiano SA (2,571) and Stucken & Co (2,031).

The average clean prices for the selection within the different categories good top-making (MF5), long fleeces were as follows: 18 microns were down by 2.1% to close at R116.78/kg, 18.5 microns weakened by 0.2% to R115.70/kg, 19 microns shed 0.2% to close at R115.32/kg, 19.5 microns rose with 2.5% to close at R112.05/kg, 20 microns dropped 2.5% to close at R109.38/kg, 20.5 microns decreased with 1.0% to close at R109.62/kg, 21 microns declined with 2.6% to close at R107.49/kg, 21.5 microns strengthened by 0.1% to R108.87/kg and 22 microns also rose with 0.1% to close at R108.87/kg.

The final sale for this year is scheduled for 10 December when approximately 15,000 bales will be on offer.

Source: I-Net Bridge

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