An increasing level of confidence in the economic outlook across both Europe and the rest of the world is having a positive impact on wool prices, according to British Wool Marketing Board (BWMB) Chairman Malcolm Corbett.
Speaking at this week's BWMB annual conference, held this year in Derry - Londonderry, the 2013 City of Culture, Mr Corbett said the latter half of the 2012 selling season and the opening sales of the current selling season showed the clear improvement in prices was being sustained.
"Demand was so strong in the closing half of last season that we sold virtually every kilo of wool which was hugely important as we headed into a new selling season," explained Mr Corbett.
"And the new season sales have kicked off in a similar strong vein, with high clearance rates and prices more than a third up on the same time last year. Importantly too, is the volume of wool sold to date as this is significantly higher than at this same time last year."
"Demand for British wool has traditionally been largely driven by the carpet market and an upturn in the housing market is helping increase demand, but the strong demand from the market in China is also having an impact on the interest and the demand shown in our product," he added.
Mr Corbett said that thanks to BWMB's competitive auction system all producers marketing their wool through BWMB would benefit from these price increases.
He added that it was clear that the auction system had been a key factor in driving prices higher. "The competitive nature of the auction system is key in delivering higher prices for British wool. It means buyers have to actively compete for the wool they want and when supplies are tight buyers have to bid strongly to secure the volumes they require."
Critically, recent auction prices have also been well ahead of the initial guide prices issued by BWMB prior to the sales season, said Mr Corbett. "Many breed types have exceeded the guide initial prices significantly and all breed types have at least met the guide price previously issued by BWMB."
With the UK's 2013 clip estimated to be 10% back on 2012 levels, this shortfall is also contributing to the price rise. "Lower average fleece weights and a falling national flock are the main contributors to this smaller clip. And this is a situation reflected around the world, with global wool clips also on a downward trend."
Welcoming the BWMB conference to Northern Ireland for the first time BWMB Board Member Ian Buchanan said it was great to see a large number of delegates from across the country in the province. "Northern Ireland is a unique part of the world with a unique farming system which is highly reliant on sheep production to maximise productivity from some otherwise underutilised land.
"BWMB's commitment to marketing wool from every sheep farmer is something Northern Irish farmers hold very dear and recent increases in wool prices are a welcome boost after the sheep farming community suffered so badly in the late spring snow storms earlier in the year."
