Optimism for wool market recovery

British Wool has confirmed it will make a payment to all producers who delivered wool to a grading depot or intermediate depot in 2020 as it signals a recovery has started in the wool market

Alex Black
clock • 2 min read
Optimism for wool market recovery

British Wool has confirmed it will make a payment to all producers who delivered wool to a grading depot or intermediate depot in 2020 as it signals a recovery has started in the wool market

But the total return for producers will average only 15p/kg.

Following ‘the most challenging 12 months in its history', British Wool said it was optimistic prices would improve this season as the shearing season gets underway.

The Covid-19 pandemic closed down the market for wool as scouring plants closed, manufacturers stopped processing and exports halted, leading to British Wool closing the 2019 season with 11 million kg of stock unsold.

However, it has now cleared this overhang and will close the 2020 clip year with a ‘minimal stock position'.

British Wool adapted by moving the auctions online and announced a restructuring of the grading depot network in January, with the savings equating to about a 7p/kg reduction in handling costs.

Since February auction prices have started to recover, with the average price around 67p/kg compared to 50-55p/kg over the last year.

Chief executive Andrew Hogley acknowledged the average return was ‘a long way below' where prices needed to be but was optimistic prices would recover.

"A healthier stock position, reduced cost base and recovering auction prices puts British Wool in a much stronger position to deliver better value for our producers in 2021," he said.

Restructure

Mr Hogley added after the restructure the firm was opening a number of new collection sites this season and was also abolishing onward carriage fees at all collection sites.

"British Wool's shearing courses are also resuming this year. We see this as an essential part of the support we provide for the industry," he said.

British Wool chair and Dumfriesshire sheep farmer Jim Robertson appealed to farmers to support British Wool and deliver wool into the firm this season after the market collapse led to some farmers not seeing the value in delivering wool.

"This in turn had a negative impact on our operating cost per kilo," he said.

"The more wool we handle the more cost effective our operations become, which in turn allows us to return more value to all producers."