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C ape Wools M onthly Summary

SA Merino indicator for 2011/'12 First sale in Sept.'11: 9511c/kg Last sale in Sept.'11: 9168c/kg Movement : -3,6% Rand/US$ at last sale: R7,80 SA Merino indicator for 2012/'13 First sale in Sept.'12: 8626c/kg Last sale in Sept.'12: 8809c/kg Movement : +2,1% Rand/US$ at last sale: R8,18

Overview for September 2012


The local market has been holding up reasonably well despite difficult trading conditions, with the Merino indicator remaining at around the R88/kg level. Though this is slightly lower than last season's levels, it still translates into a good price for the producer. The market is expected to remain under pressure over the short term, but should gain momentum over the medium to longer term on the back of expected improved demand from China. With Chinas export industry facing increasing pressure from the global economic downturn, especially in Western Europe, the Chinese government last month announced a plan to boost domestic consumption to balance its economy. With this plan, the government aims at creating 130 million new jobs by 2015, with 5 million job opportunities added every year. There are signs that the market may be moving sideways for some time to come before finding direction. A consumer survey carried out in 13 European countries showed that the quality of a product and its "skin friendliness" were the two most important factors taken into account when shopping for textiles (see page 2). Export figures for July to August 2012 show an increase in top exports to Italy compared with the same period last season. Grease-wool exports to the Czech Republic, last season the second largest importer of grease wool after China, were down by almost 42%, while grease-wool exports to India, the third largest grease-wool importer, dropped by 89%. After an absence of three seasons, Turkey has returned to the market, while processed wool was also exported to South Korea (see table below).

Australian Market Indicator for 2012/'13 First sale in Sept.'12: 927c/kg Last sale in Sept.'12: 940c/kg Movement: +1,4% SA Indicator for season to Opening: Movement since opening: Seasonal low: Seasonal high: Average to date in 2012/'13: Average to date in 2011/'12: end Sept 8737c/kg +0,8% 8737c/kg 8882c/kg 8792c/kg 9455c/kg

Wool exports for July to August 2012


Country R China/Macau/HK Italy Czech Republic UK Germany India Turkey USA South-Korea Mauritius 37 072 111 1 107 603 15 844 414 0 0 4 140 553 0 0 0 0 Greasy Kg 736 542 21 630 254 218 0 0 66 336 0 0 0 0 R 120 576 1 615 409 0 0 5 403 843 1 669 021 0 1 167 789 0 0 Scoured Kg 1 068 23 626 0 0 106 931 38 981 0 16 876 0 0 R 0 17 851 210 0 6 838 761 534 979 0 2 814 675 1 454 386 2 201 962 1 472 699 Top & Noil Kg 0 158 919 0 60 696 5 824 0 23 985 8 651 16 679 15 778 Total 1) R 37 192 687 20 574 222 15 844 414 6 838 761 5 938 822 5 809 574 2 814 675 2 622 175 2 201 962 1 472 699 % Of total FOB* value 36,1 20,0 15,4 6,6 5,8 5,6 2,7 2,5 2,1 1,4

1) Total Rand value includes value of waste exported. *FOB = free on board

Full export report (Shipments) available at www.capewools.co.za

Accumulative results for July to September 2012 Wool receipts (kg greasy): This season: In 2011/12: Change: 11 401 850 11 872 822,2 -4% Offerings at auction (bales) Merino 2012/13: 2011/12: 44 456 42 778 Other 7 352 7 757 -5,2 Total 51 808 50 535 2,5 Total kg 7 733 974 7 483 887 3,3

Cape Wools Merino indicator on 26 September 2012


SAc/kg Clean
11 000 10 500 10 000 9 500 9 000 8 500 8 000

Australian EMI on 26 September 2012


Ac/kg Clean 1 450 1 350 1 250 1 150 1 050 950 850 750 700 Opens at 1277c/kg

Opens at 9202c/kg

Closes at 9411c/kg 8809c/kg

940c/kg Closes at 1090c/kg Opens at 961c/kg 2012/13 2011/12

7 500 Opens at 8737c/kg 7 000

% Change: 3,9

2012/13 2011/12

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