… premier warns as historic local auctions begin
LESOTHO held its first-ever local auction of wool and mohair with Prime Minister Thomas Thabane warning that any attempts to smuggle the lucrative commodities would be dealt with by the police.
The historic auction commenced on Tuesday at the Lesotho Wool Centre (LWC) in Thaba Bosiu and ends today.
For the past 44 years, Basotho farmers have been selling their fabric in South Africa through brokers BKB until the promulgation of the Wool and Mohair Regulations of 2018.
The regulations which were gazetted on 4 May 2018 forbid anyone from trading in wool and mohair without a licence from the Ministry of Small Business, Cooperatives and Marketing and they stipulate that all the transactions should be done from Lesotho.
The controversial regulations have been bitterly opposed by many local farmers who feel that they not only deprive them of higher earnings in South Africa but also that they were enacted to benefit Chinese businessman, “Stone” Shi. The LWC, which is holding the auctions, is a joint venture between the Lesotho National Wool and Mohair Growers Association (LNWMGA) and Mr Shi’s Maseru Dawning Trading Company.
The LNWMGA holds 75 percent shares while Maseru Dawning holds the remaining 25 percent in the LWC.
However, Dr Thabane this week appealed to all stakeholders to ensure the success of the local auctions. He said the government had enacted the regulations to create business opportunities for Basotho and ensure the growth of the industry.
“The (wool and mohair) regulations have opened up opportunities for Basotho to venture into different businesses within the wool and mohair sub sector,” Dr Thabane said.
“On the issue of the smuggling of wool, I order the management of the police to see to it that anybody who does this is dealt with and I shall take responsibility.
“I am serious about this. The police should act and I will take responsibility. In a proper democratic dispensation, the prime minister talks and the policeman obeys, that is how democracy works,” Dr Thabane said after cutting the ribbon on Monday to mark the official opening of the auction.
He said while selling the wool and mohair at South African auction floors “had done a lot for Lesotho farmers in the past”, this was however, not enough as the bulk of profits generated from the sale of the fabric remained in South Africa while Basotho got only five percent of the proceeds.
“I am very happy to officially launch the first ever local auction of wool and mohair in the history of Lesotho at the Lesotho Wool Centre.
“For close to 50 years Basotho have been trading their fabric through South African facilities in Port Elizabeth and to some extent this benefited them (the Basotho farmers) although it was not without its own challenges,” Dr Thabane said.
When the Lesotho Times again visited the LWC yesterday, the centre appeared largely deserted with the farmers nowhere in sight.
However, in an interview at the site, Mr Shi said it was not necessary for the farmers to be present throughout as this was an online auction where local and international buyers could still participate without physically setting foot at the facility.
“I am also satisfied with the response we have received from international buyers so far but it is still too early to divulge more details about the auction which is still ongoing at the moment.
“I appeal to the farmers and other stakeholders to be patient as we get this project off the ground. We are mindful that since this is happening for the first time, there will be some challenges along the way.
“I noted the concerns of some of the farmers who were present when we started the auction on Tuesday as they wanted to know the outcome of the auction immediately,” Mr Shi said, adding the outcome of the auction will be known on Thursday when this week’s trading they have formally closes.
“The auction is structured to enable buyers from countries with different time zones such as Australia and New Zealand to participate and that is why it is running for three days. The outcome of the auction will be known on Thursday with the cut off time for auctions at 2pm.”
He said the wool centre currently has 10 000 bales of wool and 2 000 bales of mohair. More fabric is still expected as this year total production for wool and mohair is expected to be more than 30 000 bales.
“We are expecting eight factories from China, one from Italy and another from the Czech Republic in Lesotho at the end of this month to physically check out our system and even more are expected to join in as we proceed. That will improve the competitiveness of our auctions and result in improved prices for Lesotho products, which means more money for the farmers.”
On his part, Small Business Development Minister Chalane Phori, whose ministry spearheaded the enactment of the wool and mohair regulations, said he was happy with the first day of the auction.
He said there were 11 representatives of international buyers at the auction, while many more buyers opted to use the internet to register their interest.
“The auction went as planned with international buyers present to make bids for the purchase of the fabric and I am satisfied with the way it has taken place,” Mr Phori said, adding it was his wish was that the farmers would be paid in time for the Christmas holiday.
The farmers have been unable to sell an estimated M50 million worth of wool and mohair due to delays in holding the local auction.
Tšehla Jaase, a representative of the LNWMGA, said he was relieved that the auction had finally commenced after initially facing challenges.
The LNWMGA is a national network of wool and mohair farmers with a membership of about 37 000.
“I would like to thank the government for this initiative which was already in motion when they came in,” Mr Jaase said.
However, some farmers said they remained in the dark about the modalities of the auction.
Likotsi Monyeke, from Mateka Wool Shed in the Berea district, said when they arrived at LWC on Tuesday, they were surprised to learn that the auction would done through the internet.
“We knew that there was going to be an auction on the 20th of this month but we did not know that it was going to be an on-line based auction.
“We expected our committee representatives to be present to observe the fabric being auctioned but we were very surprised when it did not happen that way.
“What one can observe is that in general, this issue of auctioning fabric in Lesotho is not done in honesty. There is a lot that is not being said about it,” Mr Monyeke said.