It’s used for warmth and fashion purposes. Wool has been around for thousands of years. In today's modern society, the yarn has evolved into a thriving product, especially in the Eastern Cape. With a population of 6.5 million, the province's wool industry is having an incredible sales year, as the early-season manufacturing is attractive and causing high demand and record prices.
When it comes to an incredible product, the want for it increases, which is no surprise as to why the market for locally produced wool has risen and caused an exceptional season.
Known as the friendly city, Port Elizabeth based Cape Wools which manage the entire countries weekly bulk auction of wool, the majority of the stock is destined for international markets, stated that the clients had paid record prices for the second week running, breaking the R200/ kg resistance level.
The average prices of wool ranged between R100 and R180 per kilogram in 2016 and 2017 season was deemed exceptional and one of the best seasons in decades
Cape Wools SA stated after the auction. “The wool market delivered excellent returns with equal contributions from a weakening rand and excellent demand for good quality long wool. Prices increased across the board, with the fine to coarser ends benefiting.”
The exchange rate when the auction occurred was currently at R16.44 to the Euro and R14.13 to the dollar. Cape Wools SA chief executive, Louis de Beer, believes that expectations within the industry were outstanding to field another good season.
In first world countries such as Europe, cities like Milan and Rome are famous for being the fashion capitals of the world. The people are always searching for sustainable fashion choices that have green credentials and wool provides just that.
Due to the global wool production being at record lows, this increased the demand, which inevitably caused a positive influence on the pricing.
An important contributing factor to the remarkable sales year would be the significant market gap that caused a fantastic opportunity to increase supply, as well as wool production.
De Beer said, “Returns on wool sheep farming are excellent. Wool prices had seen an increase of around 20% over the past two years".
Due to the country being in the correct position with its necessary infrastructure, it's more than equipped to handle the increase in production.
Although the drought has caused major implications, such as the sheep foraging and costs for farmers, it also played a massive part in the quality of the wool.
De Beer believes that despite the drought, the demand for the product is incredible, and the exchange rate is favourable.
Eastern Cape farmers can certainly be proud of their accomplishments and hopefully, their fantastic streak will continue into the New Year.