24 May 2002

GETONTHEBALLWITHWOOL

By Liz Ambler

BRITISH sheep producers should take heart from comments by wool buyer, Martin Curtis, a director of Curtis Wool Holdings at Bingley, W Yorks. He sees an optimistic future for wool prices and says wool carpets are fast becoming a status symbol in a number of countries.

"The UK market will always remain volatile, but there will be less wool of higher quality about because a lot of older ewes have been culled through foot-and-mouth and the welfare scheme," says Mr Curtis.

"There are also indications that some producers are restocking with better woolled breeds. And long-term indicators of world supply and demand suggest a sustained rise in price."

Carpet industry

Most British wool goes to the carpet industry, he explains. It is in direct competition with similar style wools from New Zealand and the Irish Republic.

"The strength of the £ since 1997, particularly against the k, and the weakening of the New Zealand dollar has had an adverse effect on prices," he says.

Looking back at the wool market over the last decade, Mr Curtis reckons the biggest impact came from the removal of the wool price guarantee.

"For many producers, market forces, supply and demand and currency rates only became issues after the removal of the guarantee in 1992. This had cushioned the fluctuating and often cyclical commodity market for 40 years."

In 1992, the overall average auction price was 63p/kg, last year it was 70p/kg and this current season it is likely to be slightly lower, he predicts.

"The only significant changes occurred between 1994 and 1996, when averages ranged from 104p/kg to 117p/kg."

The large number of different native breeds in the UK, as well as half-breds and crossbreeds is reflected in the wide variation in prices paid for the nations wool.

"The UK wool clip is probably among the most diverse in the world," says Mr Curtis.

"Mainly, its value depends on the end use. Generally the trade wants clean, well-grown white wool that will spin well and take dye easily.

"The best grade Herdwick or Swaledale fleece is unlikely to command the same price as a top grade Cheviot or Radnor. That is unless a manufacturer is prepared to pay to put more work into sorting and processing it for a niche market."

White worth most

Whatever changes occur in the pricing system, Mr Curtis firmly believes that coloured wool will almost always be worth less than white wool.

"There are occasional fashion trends but I think there will always be a price differential. For example in 1995, light Herdwick wool sold for 51p/kg but dark Herdwick wool was only worth 41p/kg. By comparison, Herdwick with excess marking only sold for 24p/kg."

Although there is an obvious need for sheep producers to choose the animals most suitable for their systems, Mr Curtis says paying attention to ram fleece quality can make a considerable difference to the overall value of the wool clip. He also reminds producers that good husbandry is a contributory factor.

"Offering wool that is contaminated with tar, binder twine of feedstuffs is never going to attract users and can be avoided.

"The better quality product goes into the luxurious carpets while the dirty, tender, kempy wool can only be used for cheap carpet blends – or it may not sell at all."

Storage and shearing conditions can also take their toll on end price. The F&M crisis last year highlighted their influence on quality. He estimates that wool yields were 10-15% lower than in a normal season.

"Last years problems were unprecedented – there was so much more damaged and poor quality wool. Many producers were forced to shear in damp fields because of movement restrictions.

"Fleeces packed tightly when they are dirty and damp quickly deteriorate. The yield is less, colour is lost and if left long enough, wool will rot."

Mr Curtis said he and other buyers like him depend on supplying customers with the range of wools they need.

"If I can rely on British wool, then I am prepared to pay for it. I want to see UK farmers getting more for their wool because dealing in a quality product enhances my companys reputation."

&#8226 Wool is a commodity traded on the world market without tariffs, duties or quotas.

&#8226 It accounts for less than 3% of the worlds fibre.

&#8226 The UK is the worlds fourth largest wool producer.

&#8226 Almost 70% of UK wool is exported.

&#8226 Optimistic.

&#8226 Consider ram fleece quality.

&#8226 Shear in dry conditions.

Whatever pricing systems operate in future, white wool will always be worth more than coloured wool, says wool buyer Martin Curtis.