S. Africa hopes to export more wool to China

JOHANNESBURG - With the wool season approaching, South Africa is expecting China could import more wool, the South African wool producers group said on Monday.  

China remains the largest importer of wool from South Africa, taking up 48 percent of the total value of wool exported from South Africa," Cape Wools SA said in a statement ahead of the opening of the 2012-13 wool season on Wednesday.

Cape Wools SA is a non-profit service company established and owned by wool farmers and other directly affected industry groups represented in the Wool Industry forum in South Africa.

South Africa is the world's second largest supplier of apparel wool after Australia.

Nearly 13,000 bales of wool will be on offer at the first national auction in the southern coastal city of Port Elizabeth.

"The present situation is that all wool from Rift Valley Fever (RVF)-free areas this year qualifies for export to China," the company said.

Cape Wools SA also noted that the Department of Agriculture, Forestry and Fisheries and the Chinese government have engaged in discussions, aimed at reducing the waiting period for the export of unprocessed wool from districts that were affected by RVF to three months.

"The department presently stipulates that the three-month waiting period would come into effect after a district has been officially declared free of the disease, while the Chinese have agreed that the waiting period could start three months after the last reported outbreak," it said.

In the previous season a total of more than 280,000 bales were offered at auction. They were all cleared and a sale-value of close to 279 million U.S. dollars was realized.

However, this season will open amid uncertainty about the world economy and the debt crisis in the US and Euro-zone countries, which may have a dampening effect on prices.

"In Australia, where the new season has already commenced, prices have declined sharply. A strong Australian dollar, large offerings at auction and the European holiday contributed to this decline," Cape Wool SA said.

However, local buyers expect prices to remain relatively stable, although the market may weaken initially and then stabilize.  

The company also noted that the previous season was one of the best so far where prices had risen despite the difficult trading conditions.

Nevertheless, it pointed out that last season's prices were, to a large extent, supported by the low world offering of apparel wool, which was at its lowest level in 60 years.

Cape Wools SA appealed to wool producers to prevent contamination at all levels and to adhere strictly to the guidelines for the preparation and packing of wool.