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Merino back in favour

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The current high prices for wool seem to have triggered renewed interest in Merino sheep in both South Africa and Australia.

Locally, wool receipts to end February are up 10% compared with last season. The volume of Merino wool offered at auction has increased by almost 9%, while other white wool is up by only 1,9%.

In Australia, the Merino also seems to be making a comeback. According to a recent survey conducted by Meat and Livestock Australia (MLA) and Australian Wool Innovation (AWI) the number of Merino ewes joined to Merino sires has risen across Australia over the past five years.

MLA sheep meat analyst Robert Barker said there were a couple of reasons for the increase.

“Previously, producers were cutting back Merino ewe numbers because wool prices were low, while the drought also played a role,” he said.

“From 2008-09, the wool price levelled off, similar with lamb prices in 2010/’11. In the past year, wool prices have held on a bit better in comparison with lamb.”

Wool prices are forecast to rise over the next five years with stronger economic activity in Western Europe and the US expected to lift consumer demand for discretionary products such as woolen clothes, according to the Australian national commodity forecaster, the Australian Bureau of Agricultural and Resource Economics and Sciences (Abares).

At its recent annual outlook conference, Abares predicted that wool’s benchmark eastern market indicator (EMI) would rise by 12% in 2013/14 to average 1180 cents a kilogram clean.

More encouraging news is that Abares expects the EMI to rise by 15% to average around 1200c/kg clean in 2017/18.

South Africa’s top three export destinations are:

  1. China
  2. Czech Republic
  3. India

SA Merino indicators for 2012/13:

  • First sale in Feb 2013: 11 322c/kg
  • Last sale in Feb 2013: 11 070 c/kg
  • Movement: -2,2%
  • Rand/US$ at last sale: R8.81

More info from Cape Wools.

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.