Covid-19 hitting global wool market, Dales farmers told

Photo: Guy Carpenter.

The Covid-19 pandemic has caused a slump in the global market for sheep wool, Dales farmers have been told.

The Farmer Network, which supports farmers in the Yorkshire Dales and Cumbria, was given an update from British Wool earlier this month.

British Wool marketing manager Gareth Jones revealed the detrimental effect that Covid-19 had had on the wool market.

He said the global cross-bred wool market slowed significantly in February 2020, shutting completely at the beginning of March and slowly starting to operate now as lockdown measures are relaxed.

February to May was usually the busiest selling period of the year and the market closure has resulted in approximately 7 million kgs (26 per cent) of the 2019 clip not being sold.

25 per cent of the annual wool clip is sold to China and the wool trade saw the effects of Covid-19 well before lockdown as China stopped buying.

Although China has now been out of lockdown for a couple of months, the market remains quiet and many companies have changed their operating practices and are now making PPE equipment, rather than their usual goods.

Take that into account along with the type of products British Wool goes into, mainly carpets both domestic and commercial for airports and hotels, and it’s not hard to see why the price has dropped while the economy has been at a standstill.

British Wool said it had been operating remote auctions to try and keep the market moving as much as they can.

Large wool producing nations as such as Australia and New Zealand were experiencing the same problems.

The average British wool price for the 2019 clip is 32p/kg, the price farmers receive will vary dependent on the type of wool they produce.  Some mountain wools may only achieve 15p/kg while some of the finer white wools could expect more than 70p/kg.

Current prices are in line with the 2008 financial crash.

The balance for the 2019 clip will be paid upon receipt as normal, but no advance will be paid on the 2020 clip.

Full payment will be made for this from May 2021, once British Wool can better assess the market situation and pay an appropriate price based on market performance.

Gareth told the group that although the prices were disappointing, British Wool was still accepting all types of wool and urged farmers to send their wool as normal rather than disposing of it in other ways.

British Wool continue to work on marketing the product, Gareth explained that they are working very closely with the Chinese market and opened an office there in 2018.

The demand for a premium market has risen in demand and they have recently launched a premium bedding range with a brand called Lovo.

The demand for clothing has risen in recent years and British Wool are working with two universities exploring options for new clothing ranges as well as face masks, etc.

Although British Wool was encouraging farmers to send their 2020 clip as normal, some farmers may choose not to do this.

If the wool can be stored in clean, dry conditions, this could be done with a view to sending the wool in next year instead.

There is no way of predicting how the market will be performing in 2021, so this would be a decision for the farmer to make.

Farmers can also dispose of wool in other ways including sending to landfill, wool composting, category 3 incineration, or processing to make fertiliser, but it is important that this is performed in the correct legal manner.

Local APHA offices can give advice and the Farmer Network has produced a fact sheet for farmers detailing all the necessary information.

The online meeting was funded by the COVID-19 Cumbria Community Foundation Fund and the Prince’s Countryside Fund.