Wool price hits 25-year high says BWMB chief executive

Worldwide there has been a massive reduction in the numbers of sheep being produced and, with the supply/demand equation working, sheep producers are now getting twice the price for their wool compared with only 12 months ago.

However, the vice-chairman of the British Wool Marketing Board, Hugh Blythe of Maybole, admitted yesterday that despite this surge in value of wool, carcase prices were still by far the more significant factor in incomes for sheep producers.

"What we are seeing with the increase in the value of fleeces are producers taking more care in their clipping and care of the fleece as it is now worth more than the cost of shearing but it is still very much a secondary income," he said.

BWMB managing director Ian Hartley had a different take on the current wool price, saying that, if inflation was excluded, then the current trading price for wool was as high as it had been for 25 years.

A decade ago, the UK produced 45.8 million kg of wool, but with the reduction in sheep numbers, initially because of the 2001 foot-and-mouth outbreak and thereafter the more widespread lack of profitability in the sheep sector until two years ago, sheep numbers have fallen and it is estimated the UK clip will be less than 30 million kg this year.

This scale of loss has been replicated in both Australia and New Zealand as well as there being a more general reduction in sheep production in Europe.

Meanwhile, demand for wool has remained steady, with China taking an increasing share of total world production: Hartley reckoned that this massive industrial nation was importing half of New Zealand's production, two thirds of Australia's and 15 to 20 per cent of the UK's.

He added that, increasingly, the importation was not followed by an export of manufactured woollen goods as the rise in numbers in the newly wealthy middle classes in China meant more woollen goods were being bought internally.

Both Hartley and Blythe spoke strongly on the need for the continuation of the BWMB and its monopolistic purchases of all wool produced in the UK other than wool heading for export.

They claimed that by controlling the selling of wool through their monthly auctions, prices were produced for the benefit of the whole industry, especially the sheep farmer.