Sharp fall in wool prices confirmed

The National Sheep Association has said it is disappointed to see that Covid-19 has had a serious impact on wool prices in the UK.

While February to May is usually the busiest selling period of the year, the global market for cross bred wool has been shut since February and remains closed. As a result British Wool says there is circa 9 million kgs of unsold stock, out of a total 2019-20 clip of 27 million kgs.

The average price paid to wool producers for the 2019/20 clip will be 32p/kg, compared to 60p/kg in 2018, the cooperative says.

Some mountain wools will achieve 15p/kg and some finer white wools more than 70p/kg.

By way of comparison, British Wool says this year’s payment is in line with those paid in the late 2000s at the time of the financial crisis.

Balances will be paid as normal upon receipt of this season’s wool. If the 2019/20 unsold stock is sold at a higher price than British Wool’s assumed value, a further payment will be made later this year, depending on the economic outlook at the time.

British Wool said in a statement: ‘The hard fact is that the global cross bred wool market will be extremely challenging for the foreseeable future…

‘We are asking producers to support us through this very difficult season by bringing their wool into us so that we can preserve the volume use of British wool downstream, further develop our new British wool rich product ranges and emerge from the Covid-19 slump ready to exploit a strengthening market.

‘Without the consolidation of wool into commercial volumes through British Wool and our continuing to market it more and more effectively, the prospect will be for lower prices indefinitely.’

Commenting, NSA chief executive Phil Stocker said: “It’s not fully clear how the reduced value of the remainder of the 2019/20 clip will affect the overall value of a farmers wool delivered last year, but it would be easy to assume total fleece values might be down by 50 per cent.

“Cash flows will be affected, and many farmers will be faced with a bill from their shearing contractors but with no income to offset that. Although there are plenty of sheep farmers who do get real value from their wool most will at least expect it to cover shearing and wool handling costs. A fall of 50 per cent of total value would, for most, mean total income not clearing costs.”

Mr Stocker said the NSA is “disappointed” that British Wool has reportedly been unable to access the government’s Covid-19 support schemes.