A 34% rise in wool prices and a six-fold uplift in the volume sold to date compared with the same point in the 2012-sales calendar are a clear signal of the benefits sheep farmers gain from selling their wool through the British Wool Marketing Board (BWMB).
Speaking after the latest sale (Wednesday 18 September) which saw the indicator price settle at 153p/kg, up from 114p/kg at the same sale last year, BWMB producer communications manager Gareth Jones said the increase in price and volume sold was a direct result of competitive bidding by wool buyers.
"There is no doubt that without the auction system, prices wouldn't have risen to the levels they are at now and clearance rates would also be lower. The competitive element of the auction system is a tried and tested way of delivering the best possible prices for farmers," explained Mr Jones.
The current sales season may just be six sales old, but Mr Jones is confident better prices and higher demands are here to stay for the remainder of the sales season. "We started to see an uplift in demand at the last few of sales in the 2012 selling season and this has continued in to the new season.
"As with all commodities there is a big element of supply and demand involved in driving prices too and a falling global wool supply coupled with a resurgence in demand has helped boost trade."
And, importantly for BWMB producers, prices seen in the first six sales of the new selling season are ahead of the guide prices BWMB issued ahead of the sales. "Guide prices for all wool types have been met, with many breed types easily exceeding the guide price issued at the start of the selling season."
Mr Jones says the UK's 2013 clip is estimated to be about 10% lower than the 2012 clip which will also help stimulate demand and prices. "In the 2012 selling season BWMB sold 37m kg of wool, including a 5m carry over from the 2011 season.
"Having analysed the clips received to date we anticipate having 29m kg of wool to sell this selling season, with 33% (9.6m kg) of that having already been sold. Clearly the lower volume available will mean buyers have to bid strongly to secure the volumes they need."
Lower average fleece weights and a reduced number of sheep being clipped due to heavy losses earlier in the year are the reasons for the 2013 clip being lower than in 2012, he adds.
Mr Jones says the BWMB's promotional work both at home and abroad through the Campaign for Wool (CfW) has been a central pillar in encouraging demand for wool. "The investment made in CfW is yielding returns for all BWMB producers and as a result we will, hopefully, see wool returns increasing once again in 2014."
BWMB Chief Operating Officer Mark Powell said the indications from across the globe were for a stronger wool trade in the coming months. "There are no signs of demand slipping at the moment and the market in China, a key market for British wool, is continuing the rise seen earlier in 2013.
"Economies around the world look to be improving and there are clear signals of improvements in the UK and USA economies which will be of major benefit to wool sales. And on top of this there is a growing trend towards wool and natural fibres from both the fashion and interior design sectors."
"It is important to remember that to achieve the best prices farmers need to supply wool to BWMB in as good a condition as possible. This means without contamination from vegetation or other items such as baler twine and without discolouration or excessive paint marks too," added Mr Powell.
