As the 2019 shearing season gets underway, Ulster Wool has taken the opportunity to highlight its strong commitment to producer prices. The co-operative, which has 3,000 plus members, represents the regional centre for the British Wool organisation – formerly the British Wool Marketing Board - in Northern Ireland.
But it has been far from plain sailing, where international wool markets are concerned, over the past 12 months or so.
After a bright start to the 2018 season, the global cross-bred wool market proved extremely challenging from September onwards, due to the unforeseen US-China trade war. In the UK, increasing uncertainty over Brexit weighed on consumer confidence, reducing demand for carpet wool types.
Ulster Wool chairman Brendan Kelly commented: “Against this backdrop of economic challenge, we feel that Ulster Wool has performed relatively well, maintaining average prices in line with last season.
“This is highlighted when benchmarking against the price of New Zealand cross-bred wool. Historically, our wool has sold at a 20% discount. However, our prices have been consistently higher during 2018.”
The Muckamore-based organisation sells its entire output, courtesy of the regular auctions hosted by British Wool at its headquarters in Bradford.
Twenty of these events are rostered over a twelve-month period, with between 1.5 and 2 million kgs of wool offered each sale.
Sales are attended by registered buyers, most of whom are merchants trading internationally and supplying end-users. They buy in lots of approximately 8,000 kgs in order to fulfil orders to manufacturers.
Since the beginning of 2019, average wool prices at the various British Wool sales have increased by approximately 3.0%. Currently, UK wool prices are US$20/100kg ahead of prices in New Zealand. Kiwi prices have, traditionally, been the benchmark for the rest of the world. This is an historic turnaround in trends, where the UK is concerned.
Mr Kelly believes this success is due in part to a more strategic approach at auctions, combined with greater in-depth analysis of global trends. He said:
“In July 2018 we launched an Agency Buyer service to make it easier for new buyers to access the auction. This initiative is already starting to have a material impact on competition in the auction room, which should help support our prices moving forward.”
Current price trends also point to Ulster Wool paying a significantly higher prices than other wool buyers, most of whom operate from the Republic of Ireland. According to figures published by the co-op, this difference ranges from 5p to 10p per kilo of clipped wool. The difference is particularly significant where Texel and Lleyn fleeces are concerned.
Mr Kelly concluded: “Our prices have been consistently higher than the competition for a number of years. We’re working on many new initiatives to maximise the value of producers’ wool, so we expect this already significant difference to increase moving forward.”