British crossbred wool market

The British wool market has been through one of the most turbulent 12 month periods in its history. From a position where auction sale prices remained strong with good clearances we have seen both fall to unsustainable low levels. Farmers will turn away from wool if prices do not recover and once they do it is very hard to get them back again.

Much of this volatility was inevitable; shortages of wool and irrational buying by inexperienced and cash strapped merchants who carry no stock fuelled an uncontrolled panic in the auction room - some merchants having to pay almost any price to buy what wool they needed. It was always difficult to pass on higher prices through the supply chain up to the retailer and resistance to higher prices grew. Coupled with problems in other crossbred wool markets, lack of cash, shipping strikes, delays in shipments and the renegotiation of contracts led to a rapid decline in wool auction sale clearances and prices around the world.

Two things that stand above all else in our very competitive industry is that no one wants to buy at the top of the market and everyone wants to buy at the bottom! This is rarely going to happen. Many customers will take advantage of the situation and just like a snowball rolling down a steep hill it grows larger and gathers momentum. However, some spinners and weavers, tufters and knitters at some stage have to buy the raw materials they need and there is a constant trickle of sales and purchases even in a falling market.

Then, suddenly, everyone who has postponed buying wool has to buy it. It is uncanny how the whole market seems to move at the same time; everyone runs out of wool and then has to buy. I believe that is what will happen in the forthcoming months. Wool is a scarce fibre and with the USA economy starting to pick up, perhaps a little less concern about the Eurozone, a pick-up in housing markets in several parts of the world we will see prices firming and demand returning to more normal levels. Many people do not think the main problem is with current price levels it is more to do with market uncertainty. I have every confidence that we will see the wool market strengthen but we hope not irresponsibly.