Marginal drop in wool prices

Port Elizabeth - Difficult demand conditions have led to a marginal drop in South Africa's wool prices this week, Cape Wools said on Wednesday.

"Cape Wools' Merino indicator dropped 3.6% compared to the previous sale last week to close at R104.73/kg (clean)," said company spokesperson Ria van Rooyen.

This was 2.7% higher compared to the opening sale of this season and 3.6% higher compared to the corresponding sale of the previous season.

Van Rooyen said weak demand and a slightly stronger rand against the US dollar weighed on wool prices, with good quality wool being least affected.

She said local traders attributed the weak demand to the tightening of lending by China's major banks, which also affected business confidence.

Traders remained optimistic the market would improve due to the smaller offerings over the remainder of the current season.

The sale resulted in a 96% clearance of the 6 751 bales on offer.

The most active traders were Lempriere SA (2 166 bales), Standard Wool SA (1 446 bales) and Stucken & Co (1 217 bales).

The next sale is scheduled for 9 April when an estimated 6 000 bales will be on offer.