Wool hit by currency turmoil, but trade higher

The wool market traded significantly higher this week and the Cape Wools Merino Indicator increased by 5.8%and by 853 points to close at a value of R156.06 (clean). On the Australian market, the EMI increased 0.4%.The Cape Wools All Wool Indicator gained 5.4%.Buyers commented that overall the quality did not meet expectation. The long and better quality wool performed well compared to the short and coarser types. The turmoil on the currency markets significantly impacted trade, with buyers hard pressed to manage the associated financial risk. The underlying fundamentals of the demand remain strong. However this week’s increase can largely be attributed to the spike in the rand’s devaluation. This week saw the rand atR14.36 to the US dollar. The rand weakened by4.5% against the US dollar compared with the average rate at the previous sale. The rand weakened 2.7%against the euro and was trading at R15.84.A total of 99.2% of the offering, comprising 7 869bales, was sold.