The Covid-19 pandemic has had a "significantly detrimental" impact on the global wool market

The Covid-19 pandemic has had a "significantly detrimental" impact on the global wool market

British Wool is embarking on a restructuring programme in a bid to save costs, which will see a review of the number of grading depots it operates from.

In a statement this week, British Wool said the Covid-19 pandemic has had a "significantly detrimental" impact on the global wool market and despite the fact that it has cleared the 11m kg of unsold wool it had at the end of April, the market remains extremely challenging.

British Wool (formerly British Wool Marketing Board) is owned by around 40,000 sheep farmers in the UK, and collects, grades, markets and sells their wool to the international textile industry for use in flooring, furnishings and apparel.

Acting CEO Andrew Hogley adds wool prices remain "severely depressed."

"The global market faces an oversupply of cross-bred wool, this is mainly from New Zealand but also from other European markets. Although we have seen some more positive signs in recent auctions on some wool types, carpet wools remain under a great deal of pressure."

In order to ensure producers receive maximum value for their wool in these unprecedented times, British Wool has launched a major restructuring programme. 

From next season, it will reduce the number of grading depots it operates out of from 12 to eight, closing those in Irvine, Porthmadog, Stamford, and Liskeard. The annual savings from these measures are estimated to be GBP1.5m (US$2.04m) per annum. 

"It is critical that we make the changes to the grading network but I want to stress that we will not be changing our service levels to producers. Where we close a grading depot we intend to replace this with a new intermediate depot in the nearby area. This will ensure producers still have a local drop point for their wool with no onward haulage charges," said Hogley.

He urged producers to "stick with us", adding that without British Wool "returns for wool would be permanently low and many producers would have no market for their wool. Rest assured things will improve and British Wool will be working hard to support the recovery of the wool trade in order to maximise the value of your wool."