The wool trade remains in a desperate position, but there are now, thankfully, some positive signs that the trade could start to turn a corner. While prices remain unchanged, with fine lowland wool trading at 15c/kg to 20c/kg and Scotch wool at just 5c/kg, there appears to be some demand entering the trade.

Demand has been totally absent since the coronavirus pandemic began. Merchants report that there are more enquiries for wool and that while prices are being offered, they are still not at a level to trade – a step in the right direction, at least. They are hopeful of this building in the next few months, but also comment that it will be a long road to get prices back up to any reasonable level.

The gradual lift in demand for wool was reflected at the latest British Wool sale

A couple of merchants noted that ongoing trade wars between China and the US continue to affect the textile industry, while COVID-19 is also having grave consequences for demand.

The gradual lift in demand for wool was reflected at the latest British Wool sale, which took place on 22 September. There was a clearance rate of 83% of the 1.725m kilos of wool offered, which is gradually building from recent sales, where the clearance rate was as low as 50%. The challenge for the industry was also highlighted in 838t sold comprising old season wool and just 594t of new season wool.

This means there is a considerable overhang in supplies, which buyers are aware of, and which has to be cleared before demand will revert to normal levels.

The slowdown in the market in February, followed by a complete shutdown from March onwards, meant there were upwards of 9m kilos of additional unsold wool on hand.

Prices at the latest sale were 2% dearer, with greasy wool averaging 51.5p/kg.

British Wool and Ulster Wool have previously reported that due to the collapse in the value of wool, they will not be paying producers any advance on the value of their 2020-2021 wool clip.