Wool prices on the increase

Sheep producers can expect a 22 per cent increase in the cash they get for their wool this year but the vice-chairman of the British Wool Marketing Board admitted there were still no fortunes to be made.

Hugh Blythe, who is himself a sheep producer from Maybole, said, with the average price of wool now around £1.24p per kilo, it not only paid for the shearing but also left “enough to fill the Land Rover with fuel”.

This is the fourth year in succession that the value of wool has increased but this rise has been from a very low base.

While the price of wool has made a big recovery, Ian Hartley, chief executive of the BWMB warned that the market was currently quite flat.

Buyers were operating on a just-in-time basis and were not stockpiling and as a result, the BWMB still held between three-and-a-half and four million kilos of last year’s wool.

With a UK clip of just over 30.5 million kilos, that was little more than 10 per cent and that level of carryover did not worry him.

After years of decline in production – in 2000, the UK produced 45.8 million kilos of wool, the quantity produced in this country has not just stabilised but is predicted to show a modest increase in the coming year. In Scotland wool production was estimated to have risen by 7.6 per cent last year but other parts of the country flat lined apart from Northern Ireland where thanks to dual registrations north and south of the border, the BWMB benefitted by an extra 500 tonnes of wool from the south where wool prices have collapsed.

In total, the BWMB buys approximately 95 per cent of all the wool produced in the UK and sells it by auction throughout the year. This phased method of sale, helps maximise prices for producers, Hartley claimed.

The main player in the world wool market is China who Hartley estimated now took about 15 per cent of the total UK production as well as 70 per cent of the massive Australian output and almost two thirds of the production of that other major sheep producing country, New Zealand.

A few years back the Chinese would buy in order to re-export the wool after it had been transformed into carpets or clothes but now Hartley said it was utilising a large percentage of the finished wool garments as their standard of living has risen.