Wool prices on the rise

An increasing level of confidence in the economic outlook across both Europe and the rest of the world is having a positive impact on wool prices, according to British Wool Marketing Board (BWMB) chairman Malcolm Corbett.

Speaking at this week’s BWMB annual conference, held this year in Derry-Londonderry, the 2013 City of Culture, Mr Corbett said the latter half of the 2012 selling season and the opening sales of the current selling season showed the clear improvement in prices was being sustained.

“Demand was so strong in the closing half of last season that we sold virtually every kilo of wool, which was hugely important as we headed into a new selling season,” explained Mr Corbett.

“And the new season sales have kicked off in a similar strong vein, with high clearance rates and prices more than one-third up on the same time last year. Importantly, too, is the volume of wool sold to date as this is significantly higher than at this same time last year.”

“Demand for British wool has traditionally been largely driven by the carpet market and an upturn in the housing market is helping increase demand, but the strong demand from the market in China is also having an impact on the interest and the demand shown in our product,” he added.

Mr Corbett said that thanks to BWMB’s competitive auction system, all producers marketing their wool through BWMB would benefit from these price increases.

He added that it was clear that the auction system had been a key factor in driving prices higher. “The competitive nature of the auction system is key in delivering higher prices for British wool. It means buyers have to actively compete for the wool they want and when supplies are tight buyers have to bid strongly to secure the volumes they require.”

Critically, recent auction prices have also been well ahead of the initial guide prices issued by BWMB prior to the sales season, said Mr Corbett. “Many breed types have exceeded the guide initial prices significantly and all breed types have at least met the guide price previously issued by BWMB.”