Wool crisis mars China-SA relations

South Africa’s wool industry faces an existential threat – the refusal by China, which takes most of South Africa’s wool clip, to accept further shipments.

Huge losses have already been incurred, and the race is on to get the blockage lifted in time for this week’s annual wool auction. Unless the impasse is resolved, it will result in a blot on the trade relations between the two countries.

The annual wool clip is worth around R5 billion, and between 70% and 80% has gone to China. Then, in April this year, China banned South African wool imports because of outbreaks of foot and mouth disease in the country.

Officials say the ban is unnecessary because South Africa complies with protocols agreed between the two countries, and there have been no outbreaks of foot and mouth disease in any wool growing areas.

Leon de Beer, general manager of the National Wool Growers’ Association, told Farmers Weekly he believed China had misunderstood the extent of the outbreak.

The ban is being billed as the biggest challenge South Africa’s wool industry has faced in the past two centuries.

The livelihoods of 35 000 full-time and 4500 seasonal workers are in jeopardy. In addition, more than 40 000 small-scale producers market close to 6 million kilograms of wool annually, worth an estimate R300 million.

Since the ban was imposed in April, the wool industry has lost an estimated R734 million in wool exports to China.