The reduction in demand for wool on global markets was reflected in this week’s British Wool auction held on Tuesday. The clearance rate from the offering of 1.128m kilos of wool was recorded at 73%, a reduction of 15% compared to the first sale of the season held at the start of July.

British Wool reports that 266t of the sale offering was last season’s wool, with 196t (73.7%) of this trading on the day. The company said that many of the old season lots were either small, of a faulty nature or at the poorer end of quality specifications for the relevant grades.

The sale report outlined: “These had to be discounted to ensure we clear them out. Some types went totally unsold with the bids received being below British Wool’s reserves.”

There is 200t of last season’s wool remaining and this will be offered at the next sale. The clearance rate of old season wool and new season wool was similar at 73%, with 633t of the 862t of new season wool traded. British Wool attributes the lower clearance rate to factors such as UK scouring facilities closing for a period during the summer months, as well as many European countries experiencing a shutdown in activity in August.

Price trends

The average greasy price for wool presented (sorted, graded and packed) was recorded at 78.8p/kg (86c/kg at 84.1p to the euro), a fall of 6.2p/kg on the previous sale. The clearance by wool type was summarised as 60.7% for fine wools, 69.4% for medium wool, 81.7% for Mule wool, 73.6% for hill wool, 84.9% for mountain wool and 16.2% for lamb’s wool.

The trade for wool in Ireland is unchanged, with lowland wool ranging in the main from 15c/kg to 20c/kg, while black/grey Scotch wool is trading for 5c/kg and white Scotch wool is marginally better at 10c/kg or slightly higher.

Merchants here report that the low value of wool is having a marked negative effect on how wool is being presented for sale.

There is an increase this season in damp or wet wool being identified with some merchants/collection centres identifying wool packs so they can be traced back to the producer.

Limited global demand

Demand for wool on global markets continues to be directly affected by a severely limited appetite from Chinese customers, who dictate trade dynamics.

Demand for wool used in manufacturing industries has not picked up since lockdown conditions returned in February/March 2022 and reports indicate there is an overhang of wool in the market.

The poor appetite for this wool is being compounded by a number of wool scouring and processing facilities ceasing operations due to businesses not staying afloat as a result of COVID-19, rising costs and tightening environmental regulations.

Merino wool

The latest prices reported for Merino wool by Australian Wool Innovation Limited show Merino wool trading at 13.88 Australian dollars per kilo, or €9.38/kg.

This is a reduction of 10c/kg to 24c/kg, with market demand underpinned by Chinese buyers and European and Indian buyers reported as being temporarily absent from the trade. Merino wool is a high-quality wool that is used in the textiles industry.