Mohair auctions open in July

Bereng Mpaki

LESOTHO Wool Centre (LWC) is set to hold its first auction for mohair next to end a decade long practice of selling the commodity outside the country.

The centre started receiving mohair from farmers around the country on Tuesday.

LWC is a joint venture between the Lesotho National Wool and Mohair Growers Association (LNWMGA) and Maseru Dawning established as part of the International Fund for Agricultural Development (IFAD) – supported Wool and Mohair Promotion Project. The joint venture was established to increase the farmers’ financial returns from the sales as they bypass the middleman.

The wool centre, which is located in Thaba Bosiu is believed to have attracted an investment of over M40 Million in its development. M4 million is believed to have been contributed by LNWMGA while the rest is from Maseru Dawning. Maseru Dawning is led by Chinese investor, Stone Shi.

LNWMGA is believed to hold 75 percent of the share ownership of the centre while Maseru Dawning holds 25 percent.

Touted as the largest facility of its nature in Africa, LWC spans a 10 000 square metre area which can accommodate twice the quantity of wool and mohair currently being produced in the country. The country produces 4000 tonnes of the fabric per annum.

However, since the completion of its construction last September, the centre is yet to commence its full operations, which include storage, sorting, sampling and auction among others. This is due to a dispute between the two partners that even spilled into the courts.

Describing the ordeal that he has gone through over the last few months due to the dispute with his partner LNWMGA, Mr Shi said it has been “a very hard time” for him,

Mr Shi said he was relieved that some fabric was starting to come in however, he remains unsure of what the future of the centre holds.

“I am still scared and unsure what the future holds for the centre,” Mr Shi said.

“There is no telling what my partner (LNWMGA) might decide to do.”

He said the centre has received 38 bales of mohair from a Butha Buthe wool shed and 41 bales from a wool shed from Mokhotlong district. He further indicated that he continues to receive confirmation from more wool sheds interested to send their mohair.

“We are expecting to receive about 200 bales of mohair in the coming week. We hope to hold the first mohair auction by end of July 2018 while we expect the wool auction in October this year.

“We are confident of attracting reputable factories to come and bid for the commodities,” he said.

On the readiness of the centre to commence auctions, Mr Shi said the facility embarked on a pilot exercise in December 2017 where it sold fabric to international spinners directly from the country.

The exercise, through which about 800 bales were sold ran smoothly and proved that the centre is ready to commence full operations. The auctions raised M9,2 million.

The farmers whose wool was sold in the pilot phase were paid within two months. This is an improvement from the period of up to eight months that they would previously get their payments when their fabric was sold in South Africa.

Mr Shi further indicated that the farmers were able to earn more money in this direct way of selling. He said the fabric was valued at an average of M116 per kilogram, as compared to M82 per kilogram which they got in the 2016/17 shearing season.

He said he would be happy to work hand in hand with the LNWMGA to improve Basotho’s lives.

“After all, these are the people who invited me to come help improve their industry.”

Speaking on the new wool and mohair trading regulations recently gazetted by the government, Mr Shi said farmers would be the ultimate winners.

The government on 4 May 2018 gazetted the Agricultural Marketing (Wool and Mohair Licensing) Regulations 2018. The regulations state that no one will be allowed to trade in wool and mohair without a licence from the Ministry of Small Business, Cooperatives and Marketing.

The regulations further state that “the holder of an export license shall not export wool and mohair unless it is prepared, brokered, traded and auctioned in Lesotho”.

“A person who is found to be in a business of wool and mohair shearing shed or exporting without a license will be fined M20 000 or to imprisonment for a period not exceeding two years or both sentences. A person guilty of brokering, testing, processing, trading and auctioning wool and mohair without a licence will be eligible for a M50 000 fine or a maximum of five years imprisonment,” the regulations say.

Mr Shi hailed the regulations as positive move by the government that were put in place with the country and the farmers in mind.

“I have no doubt that their (the regulations) implementation can only benefit the farmers more, which will help to grow the country’s economy,” Mr Shi said.