After a tumultuous few months, the wool market is returning to stability, with prices on the rise again at the last two British Wool Marketing Board auctions.
Speaking at last week's BWMB annual conference in Edinburgh, chairman Malcolm Corbett told delegates that, much like the rest of the sheep trade, the wool market had been a victim of its own success in the previous six months.
"Strong wool prices last year and in the first quarter of this year led to slowing sales and lower clearance rates at BWMB auctions," he said. "As a result, the market dipped below where we expected it to be. The Board Sales Indicator fell from a high of 184ppk last year to 112ppk, before rising to 118ppk at the last sale on the back of an improved New Zealand market."
Mr Corbett said tough trading conditions across the world had led to the market dip.
"The UK carpet market is struggling with low consumer confidence and the Chinese market has slowed dramatically, leading buyers to try and force prices down," he said. "But with little demand BWMB has resisted slashing its auction reserve prices as it wouldn't have had any effect on sale clearances. Instead we chose to maintain auction prices and ended the last sales season with higher-than-anticipated stocks."
The situation, though, has been repeated across the globe, said BWMB chief executive Ian Hartley. "New Zealand prices have fallen heavily too, with prices in July falling by 20%, to levels 45% below last year's prices."
But there are reasons to remain upbeat, he said. "The Campaign for Wool is capturing the imagination of manufacturers, retailers and consumers across the world. The recent CfW launch event in New York was a major success, with sheep taken into central Manhattan to capture the imagination of the American public. We see the USA as a major market for wool as just 2% of the floor coverings in America are wool-based. Because of the size of the market, just a small shift in demand in America would have a massive effect on the wool market. Supply across the globe is static, so if we can re-invigorate demand, prices will undoubtedly have to rise in line with a competitive marketplace."
He said the BWMB had enjoyed another successful year in shearing training, with more than 1,100 trainees.