Wool And Mutton Market Trends

A drop in the local supply of wool and mutton due to the effect of the drought on sheep numbers, and an increase in global demand, have combined to support higher producer prices.

- Karabo Takadi

South Africa’s wool industry has performed exceptionally well over the past two years. The market indicator kicked off 25% higher in 2017/2018 than in the previous season.

Wool then experienced a steady sideways increase throughout 2017 to close 39% higher than the 2016 season. At the end of the season, the market closed at a record high of R211/kg (clean).

Global and local demand for good quality, long and finer wools has continued to improve, and exceed production.

Growing global demand for natural fibres and the current weakening rand will mean more profitable exports. Increasing demand for quality and finer wools, despite tight supplies, also supports high prices.

Production is currently on a downward trend, which coincides with the large decline in national sheep numbers as a result of the widespread drought in recent years. Flock rebuilding is under way, but local supply will remain limited for a while.

REGIONS

The Eastern Cape is South Africa’s largest producer of wool, followed by the Free State and the Western Cape.

The Boland, including Ermelo and Standerton, was once the country’s main wool-producing region. However, rising stock theft, urbanisation and mine developments have resulted in a decline in wool production here.

Caledon in the Western Cape produced the most wool this season. During the 2017/2018 season auction, the Eastern Cape and the Northern Cape received the highest average value per bale at R15 000.

DEMAND FOR LONGER WOOLS USED IN UNIFORMS

Thanks to positive sentiment on the global market, the local price for quality, clean, fine wool is currently at a record high of R201,36/kg. The average price for the 2017/2018 season is R184,56/kg, compared with R155,86/kg for the previous season.