Wool is the latest commodity to fall victim to the coronavirus pandemic, following a collapse in demand worldwide.

The temporary closure of much of the world’s textile industry has shut off supply channels and backed up supplies of processed wool.

The closure of wool scouring plants is also preventing further processing and eroding demand for greasy wool (wool in its shorn state).

This leaves Irish wool merchants unsure as to where the market currently lies for this season’s wool. Some are offering to take in wool now, but not finalise prices until there is more activity in the market and a more accurate sense of what price the market can return.

The closure of wool scouring plants is also preventing further processing and eroding demand for greasy wool

At current dynamics, merchants say the market is only capable of returning a price of 15c/kg to 20c/kg for lowland wool.

This is a reduction of 30c/kg to 35c/kg on average 2019 sale values. With white Scotch wool typically running 20c/kg lower than good lowland wool and black / grey Scotch wool 30c/kg even lower, it leaves wool from hill sheep at a potentially negative value.

It is a grim outlook for farmers, who will have to subsidise all or the majority of shearing costs for 2020. Shearing quotes average €2.25/head to €2.50/head and can range from €2.00/head to €3.00/head, depending on the numbers involved. Taking a 100-ewe lowland flock, a wool price of 20c/kg and a shearing cost of €2.50/head, this leaves the value of the wool clip at just €48 and farmers subsidising the cost of shearing down by €202.

It is a grim outlook for farmers, who will have to subsidise all or the majority of shearing costs for 2020

If markets do not recover, hill sheep farmers will have to bear the full cost of shearing.

Merchants are hopeful that demand from China, which dictates global wool markets, will recover in the short-term.

However, another cloud hanging over the industry is lower oil prices reducing the cost of producing synthetic fibres.

Merchants are appealing to farmers planning to store wool until markets recover to pack and store wool in optimum conditions.