Relief as China lifts ban on South African wool

The South African government has reached an agreement with Chinese authorities to lift restrictions on the export of wool that were imposed because of a foot-and-mouth disease outbreak in parts of the country. The restriction has been in place since April 2022 and included all products from cloven-hoofed animals out of South Africa.

Up to 3% of all the wool produced in the world comes from South Africa. It is makes 12% of the global apparel wool. South Africa has a long history of wool farming that started with the arrival of merino sheep in 1789. The country produces around 45 million kg of wool per year, valued at about ZAR5bn (US$296m). Most of this (70-80%) is exported to China. So when Beijing imposed the ban the wool industry lost over ZAR 734m (US$43m).

Industry stakeholders had hoped for a diplomatic breakthrough before South Africa’s first wool auction of the season on 17 August but this didn’t materialise. Brokers decided to provisionally continue with this season’s auctions, albeit at lower volumes, as there was still demand for wool suitable for the European market. While Europe can absorb marginally more South African wool, there currently isn’t enough international demand – particularly for shorter and lower-quality wool – to make up for Chinese volumes. Some traders have taken the risk of buying wool with the hope to sell it in the Chinese market once the ban lifted.

Industry association Agri SA argued the ban was unjustified since South Africa has protocols in place for the treatment of sheared wool that would kill any foot-and-mouth disease, as prescribed by the World Organisation for Animal Health. All export storage facilities in South Africa have also been registered with the Chinese authorities. In addition, Agri SA highlighted no foot-and-mouth disease cases have been recorded in recognised wool-producing areas. 

According to Cape Wools – an industry representative organisation – there has been a meeting between the South African Ambassador in Beijing and the Director General of China’s Ministry of Foreign Affairs (MOFA) regarding the ban. MOFA committed to facilitate talks between Chinese customs officials and the South African delegation. During the meeting it came to light that customs officials weren’t fully aware of the 2019 foot-and-mouth disease protocols introduced by the South African wool industry, possibly owing to personnel changes.

 

References

‘Foot & mouth disease | China bans SA wool imports’, eNCA, 07 April 2022

‘Government action needed to stop unwarranted, job-killing China export ban on SA wool’, Agri SA, 02 August 2022

‘Farming in SA | China urged to end wool ban’, eNCA, 03 August 2022

‘Foot and mouth disease (FMD) stakeholder update’, Cape Wools SA, 12 August 2022

‘Wool ban to China: Auctions continue, but…’, Landbou.com, 12 August 2022

‘SA wool industry statistics’, National Wool Growers Association, 19 August 2022

‘Lifting of China’s ban on SA wool brings welcome relief for local industry’, Agri SA, 24 August 2022