A drop in demand for wool products as a result of the Covid-19 pandemic could severely impact prices for the next 12-18 months, British Wool has warned.
The crisis 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 China 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 circa 7 million kgs extra of unsold 2019 clip wool.
This is on top of the circa 3m kgs that would normally be carrying at this time of year, the group said.
The market closed in New Zealand at the same time, meaning NZ wool agents and auctions will also be carrying significant unsold stock.
Joe Farren, CEO at British Wool, said the Covid-19 pandemic would make the 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," he said, adding that British Wool 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," Mr Farren added.
"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."
During the coronavirus pandemic, British Wool is maintaining service to producers, working with the industry on the shearing shortage and moving to a remote online auction.