THE chief executive of British Wool, Joe Farren, says its depots and head office function are operating and it is collecting and receiving wool as usual despite the short-term challenges facing the wool sector and the economy in general as result of the Covid-19 pandemic.

British Wool said that as we head towards the shearing season its network of depots and collection sites are ready to start receiving wool from producers – "which, given the circumstances is quite an achievement". It said that following Government guidance relating to Covid-19, protocols are in place to ensure the safety of producers as well as British Wool staff.

However, it said that the Covid-19 pandemic has had a significant impact on the global wool market which affected British Wool before the rest of the UK due to the reduced demand from the Chinese market in January. The global cross-bred wool market slowed significantly in February and then shut completely at the beginning of March and remains closed.

February to May is normally the busiest selling period of the year and, as a result, British Wool has about seven million kg extra of unsold 2019 clip wool on top of about three million kg that it would normally be carrying at this time of year. The market obviously closed in New Zealand at the same time meaning that New Zealand wool agents and auctions will also be carrying significant unsold stock.

Joe said: “The severe, hopefully short-term, drop in demand for wool products coupled with the huge global overhang in cross bred wool stocks from the 2019 season is likely to severely impact prices for the next 12 to 18 months.

"It will also make our longer-term objective of repositioning British Wool as a premium product more challenging. However, finding new demand for our wool in China at attractive prices will be a key driver of the early stages of recovery in British Wool prices. We must be more determined than ever in this objective.

“Wool producers can be assured that British Wool will be at the forefront of leading the growth and renewal of wool values, but this will take time. We will emerge stronger from this period, in particular because our China based product development strategy will be further advanced and helping to pull prices up out of the trough.”

British Wool recently collaborated with industry partners to establish the Shearing Register and the Covid-19 checklist for shearers and farmers.

Joe added: “During these difficult and unprecedented times, British Wool continues to be proactive – maintaining service to producers, working with the industry on the shearing shortage and moving to a remote on-line auction. Also, during the last year, we achieved a first major new buyer in the auction room for a decade (more than one million kg) plus a number of smaller buyers from China and India had started bidding at our auctions prior to the market shutting.

"It’s important for producers, and the UK sheep sector, to have confidence they can continue to rely on British Wool as a trusted partner in providing a high level of service and in increasing wool returns for producers in the long term.”

The National Sheep Association (NSA) said that as the shearing season was about to get into full swing it was pleased to get clarity from British Wool that wool collections and deliveries into depots will continue as usual.

NSA chief executive Phil Stocker said: “With so much uncertainty generally, we welcome that we are in a situation where shearing gangs can operate and wool can be moved. However, the news of the carryover of ten million kg, nearly a third of British Wool's annual clip, is less welcome, although the UK is not alone in this.

“Fortunately, most British sheep farmers are used to wool covering shearing and handling costs and often not a lot more, with few farmers relying on wool values for a living. We do have a small number of sheep farmers who continue to do well out of wool, and who have managed to climb out of relying on what is essentially a global commodity market. In my opinion, this is the only way to remove ourselves from global economic impacts and achieving this on a national scale is a big challenge.”

The NSA said it would continue to correspond with British Wool and keep members abreast of any information it can.