British Wool launches cost-saving initiative to tackle falling prices
In order to cope with the drop in the price of wool caused by the pandemic, industry organisation British Wool has announced that only eight of its 12 grading depots will remain active during the coming season. This should enable the cooperative association to save around £1.5 million ($2 million) over the coming year.
“British Wool has managed to sell wool in decent volumes since August which has allowed us to clear last season’s unsold stock,” said British Wool in a statement. The organisation counted 11 million kilos of unsold stock at the end of April, 2020. “But prices are still severely depressed. The global market faces an oversupply of cross-bred wool, this is mainly from New Zealand but also from other European markets. Although we have seen some more positive signs in recent auctions on some wool types, carpet wools remain under a great deal of pressure.”
The closure of its grading depots in Irvine (South West of Glasgow), Porthmadog (Wales), Stamford (Midlands), and Liskeard (in the far South West) should not cause any additional transport costs for local breeders, said British Wool.
“We will contact all affected producers ahead of next season to let them know where the new drop off points will be,” said British Wool. “We will also continue to take all types of wool from any producer. The sites we are closing are still open for producers to deliver this season’s wool and will remain so until the middle of February.”
British Wool has a network of 40,000 sheep farmers in its ranks. It collects wool from these farmers grades it, and sells it in local and international markets. The organisation is in direct competition with New Zealand Wool, which has the most similar stock in terms of variety and quality. British Wool had long suffered from having lower selling prices (around 20% less) compared to New Zealand Wool. According to the association’s 2019 report, this trend had been reversed two years ago when the price per kilo was set at £60. However, the coronavirus pandemic has reduced this price to just £32.
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