Wool price near all-time low

The main reasons for one of the lowest prices on record are a buying cut-back by China, the world's biggest market, weakness of the US dollar and British wool's inability to compete with comparable New Zealand types - which themselves hit a 30-year low during the winter.

But it could be worse for Britain's wool producers than prices at half what they were a decade ago, said Ian Hartley, managing director of the British Wool Marketing Board, yesterday. The clip throughout the rest of Europe is virtually worthless.

He said: "We're the first to say our prices are not good. But they're at least twice the level anywhere else in Europe."

Prospects for this year's estimated 37-38 million kg UK clip look little brighter, he admitted at the board's Galashiels collection and grading depot. He said: "We produce less than 5 per cent of world wool and can't influence an international market dominated by New Zealand and Australian production and Chinese buying patterns."

About 70 per cent of British wool is used to make carpets and wool comprises about 20 per cent of UK "interior textile" use. In many countries, including the US where only about 3 per cent of interior textile is wool, synthetic materials dominate.

Hartley said: "Work by the International World Textiles Organisation shows that the people who like wool and pay for it are older. The organisation says that a big education programme about the benefits of wool - including its much more friendly ecological 'footprint' than synthetics - is needed."

He added: "Only an increase in price is going to work. We have cut costs as far as we can."

The economics of wool production - the foundation of fortunes for merchants, hefty incomes for farmers as recently as half a century ago and whole dynasties in the Middle Ages - have probably never been worse.

Hartley said: "I do get farmers reminding me that at one time the wool clip would pay the rent on a hill farm or the shepherd's wage, but we're never going to see that again."

Scottish fleece weighs about 3 kg - the UK average is about 2.2 kg - making it worth about 1.30. Contractors' shearing costs alone are now 60p to 1 per sheep.

According to the wool board, the last of Britain's statutory marketing organisations, with responsibility for handling all wool produced, a kilogram of wool costs 20.8 to collect, grade and sell, 5.2p for marketing and research and development, and 1.0p per kg for investment.

The total is 27p, and even that, says Hartley, is the result of cost pruning including two thirds of staff going in the past decade, the number of depots cut - only three now for the whole of Scotland - and continuous efforts to encourage efficiency such as on-farm wool presses, reducing haulage costs by offering incentives for farmer-delivery, and grading depot improvements.

A 1.5 million replacement programme for 800,000 wool sheets (sacks that hold 30 to 40 fleeces) has also started, with a plea to farmers to cut down the 15 per cent of sheets they lose or put to other uses every year.

Rog Wood, board member for the Scottish Southern region, told the press briefing: "Wool prices are low, but thanks to the board farmers are still getting 450 a tonne for what otherwise could be a waste product they had to pay to dispose of."