Many SA growers who put wool on hold several months ago - hoping the market fall might be a "short-term glitch" - are now realistic that prices are likely to be "somewhat depressed around current levels" for at least this year, according to Quality Wool area manager Simon Seppelt.
The Jamestown-based broker says shrinking global demand for "disposable-type discretionary clothing" in the midst of recessionary behaviour due to the COVID-19 pandemic has caused wool prices to fall heavily and quickly.
"It's easy to compare prices this time 12 months ago because they're nearly half and that has disappointed a lot of woolgrowers and rightly so, because no one likes a pay cut," he said.
"For that reason, a lot of wool has gone on hold. Some people were ahead of the game, fearing the worst, and they sold wool early and have been advantaged to do so."
Mr Seppelt said some sellers had come to the view that "the devil they know now is better than the devil they may not know until three months' time", opting to sell now rather than wait and risk the market becoming even cheaper.
Despite the realisation that the wool downturn might last longer than first thought, Mr Seppelt said it was alarming how much wool was still being put on hold by growers.
"The amount of wool on hold in broker stores is increasing," he said.
"As we hope to see a market recovery, it's going to be a very difficult and delicate issue to manage because there will be a lot of people that will want to sell a lot of wool all at once."
In the coming weeks, Mr Seppelt said he wouldn't be surprised if a significant amount of wool was withdrawn from auction on the back of last week's price drops.
Geoff Walker, Walkerville Pastoral Company, Kulkami, says he has seen the cyclic nature of the wool market before in more than 40 years as a woolgrower.
"We have done pretty well in the past three to four years and capitalised on it when prices were good, but now it is right back to where it was probably six years ago," he said.
"It is hard to say where the market is going, but I'm not surprised with the real lack of confidence in the market due to coronavirus."
Earlier this week, Geoff and his son Tom finished their main shearing of 1100 Merino ewes and will shear another 1500 hoggets and lambs in three weeks.
At this stage they plan to offer the wool at auction in a few weeks' time, but will be following market reports closely.
"It is a tough question - do we sell or do we sit on it?" he said.
Geoff is remaining positive, especially with lamb and mutton prices remaining strong.
"We were very fortunate to sell one lot of old ewes a week or so ago for good money," he said. "Years ago we might have got $20 to $30 for old ewes, now it is more like $130-$150."
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