Port Elizabeth facts finding mission

Writes : ‘Makarabo Mats’umunyane

Mohair that has been shed in April is still in warehouses and on trucks waiting only for permits to proceed to Port Elizabeth where auctions are about to close. The wool shearing season on the other hand has begun and while Lesotho mohair clip is still not yet sold, wool growers wonder if the same fate awaits their wool after shearing, especially when the law has been passed by the National Assembly with a close margin of 53 (for) versus 46 (against) in a lower house of 120 seats.

In trying to bring an end to this dilemma that the sector is facing, we must seek to understand the whole structure of wool and mohair marketing and trading so that at least we know what we would be getting ourselves into should we decide to start selling/auctioning fibre in Lesotho.

Wool Testing Bureau of South Africa

Wool Testing Bureau of South Africa

 

The facts finding mission that was led by Morena Seeiso Bereng Seeiso was an educational tour in Port Elizabeth which aimed at educating some of our Basotho leaders on the holistic level of wool and mohair marketing and trade. The tour started in BKB which is currently the largest Lesotho wool and mohair broker (not buyer). Here the manager (wool and mohair section), Isaak Staats, presented the general operation of BKB and addressed questions from the crew which consisted of Chief Seeiso Bereng Seeiso, Chief Lesaoana Peete, Hon. Selibe Mochoboroane, Hon. Lekhetho Rakuoane and several media houses from Lesotho.

According to Staats, BKB has one of the best warehouses in the world covering the floor space of about 110 000m2. All wool and mohair is received into the warehouse, machinery of the latest technology and automated systems are used for recording and tracking fibre bales from the moment they enter the warehouse up until they leave the warehouse after being sold.

Moreover, Staats pointed out that the price of wool and mohair is determined by the exchange rate as well as the global demand, the fibre diameter, cleanliness and quality, thus prices keep on changing from year to year. This year the mohair price has increased by 9.6% and the competitive method of auctions enable the highest possible selling price for farmers.Staats continued by saying that, “The Exchange” in Port Elizabeth, is a place already known by wool and mohair buyers from all over the world.

South African Wool and Mohair Buyers Association (SAWAMBA) represents a collection of international buyers who are interested in purchasing and using wool and mohair from South Africa and Lesotho.

The Chairman of SAWAMBA,
Anthony Kirsten, told the crew that wool and mohair buyers require consistency and reliability of the product. The delay of the Lesotho mohair clip will result in a permanent loss of the market as they will find substitutes in the absence of the Lesotho clip as they (buyers) also have to meet the demand from their clients.

Chairman of SAWAMBA Anthony Kirsten

Chairman of SAWAMBA Anthony Kirsten

 

Furthermore, SAWAMBA highlighted that it would be very difficult for an auction in Lesotho to attract buyers because of the small volume that is produced in the country and it would be costly for the buyers to travel to Lesotho for such a small volume (5-6 million tons of the 50 million tons of wool that BKB collects each year).

In addition, “The Exchange” is situated near the ship harbour, making it easy and convenient for wool and mohair buyers to ship their wool to Europe and to all over the world after buying the wool.

All wool and mohair lots that will be sold at auctions require testing by an internationally recognized and independently certified testing authority for sale. For wool and mohair that will be sold at The Exchange, all lots are tested by the Wool Testing Bureau of South Africa (WTBSA).

The Vice Director of WTBSA, Wian Heath when giving a tour, told the crew that a lot of money, specialised equipment and expertise are needed for setting up and operating a laboratory of that nature.

Testing also helps to determine the fibre price for buyers as it helps in describing the quality of the wool being auctioned. The parameters that are tested are; percentage clean yield, type of seed in the wool, the fibre diameter, fibre strength and the amount of grease in the fibre.

Wean Heath guiding the tour at WTBSA

Wean Heath guiding the tour at WTBSA

Wian Heath further explained that WTBSA is a globally recognized International Wool Textile Organization (IWTO) licensed laboratory. The IWTO licensing requires the WTBSA to be accredited to ISO 17025 by The South African National Accreditation System (SANAS). An essential requirement for accreditation is the participation in proficiency testing.

WTBSA is therefore a member of the International Laboratories Round Trial group (ILRT) which includes other large wool testing laboratories in Australia, New Zealand, and the UK amongst others.

All wool and mohair testing and certification operations at WTBSA are performed in strict accordance with IWTO test methods and regulations to provide international buyers and processors with a basis of confidence in the IWTO Test Certificates issued by the WTBSA.

Looking at all these facts, it would be very impossible now for Lesotho to run such a complex business in the country as per the Regulations on Wool and Mohair Marketing and Trading that were passed by the Lesotho Parliament on the 25th of September 2018.

The vision would perhaps be a good one in a long run when all factors and role players in wool and mohair business are carefully and diligently considered.

In addition, we might want to think that the regulations, though they are said to be to the benefit of the farmers and the country at large, they might bring more loss than gain as the mohair season is very close to lapsing at the end of September, moreover in light of the auction that failed at Thaba-Bosiu.

The mohair prices were at their highest at The Exchange where the highest price per Kg was around, R539 hence mohair growers have lost a lot of money by missing the auctions at the auction house.

The only available market will be the informal market in China which buy at very low prices. Selling wool and mohair in Lesotho will only allow a monopoly which will benefit the new broker not the farmers. All prices will be the broker’s since there will be no competition at all, unless something drastic happens, of which we cannot possibly extrapolate at this juncture unless we are given more information.

Hon. Mochoboroane and Hon Rakuoane at the end of the tour, were both of the opinion that even if it were possible to have money to establish such a facility by tomorrow, it would be very difficult to maintain it in terms of the operation costs in comparison to the volume of fibre that Lesotho produces.

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