The price of wool has increased more than 70% in the last year, helped in part by a smaller British flock of sheep and a dwindling of the global stockpile produced during the Covid-19 pandemic, according to BBC News. On average, a kilogram of clean shorn wool sold for £2.54 in the most recent sale, compared with less than £1.50 a year ago. Prices reached a 10-year high earlier this year, the BBC reported, after some farmers burnt fleeces in protest against how little they were being paid.
Supply and demand: fewer sheep, cleared stockpiles
According to Gareth Jones of British Wool, the price boom came down to supply and demand. Key factors cited in the BBC report include:
- Fewer sheep in Wales and across the UK, producing less wool
- Fewer sheep in comparable markets such as New Zealand
- A carry-over of wool since Covid that has been cleared in the last two years
"There are less sheep in Wales, less sheep in the UK, producing less wool and if we look at a comparable market like New Zealand, there are less sheep there. They also had a carry-over of wool since Covid – that's cleared in the last two years." — Gareth Jones, British Wool
The combination of a reduced British flock and the clearance of pandemic-era stockpiles has tightened supply at a time when demand remains strong, the BBC reported.
Farm-level impact: shearing costs covered
Wyn Williams, who keeps a flock of 700 sheep on the hills above Llanfair Caereinion in Powys, said the demand and subsequent increase in price "helps cover costs." He described shearing as an expensive business: "We've got professional shearers coming, it's not everybody who can shear. You've also got your helpers, the wool wrappers and everything else so it assists with the costs."
Like most sheep farmers, Williams primarily rears his sheep for meat and breeding rather than for their wool, but the fleeces still need to be removed for animal welfare. "Most importantly we have to shear from an animal welfare and health perspective. Who would want a big, strong winter coat still on with the excessive heat we're having at the moment?" he said.
From fleece to end product: 68 grades
Williams's fleeces are taken to a local wool depot in Newtown, where manager Barry Bellis sorts them through by hand. Bellis said he could spot 68 different grades of wool, with the best destined for formal wear while others ended up as slug pellets. Wool is also used in products ranging from flood protection systems to slug pellets, according to the BBC, further helping fuel demand.
| Wool grade | End use | Source |
|---|---|---|
| Blue face Leicester fleece | Knitwear such as men's suits | Barry Bellis |
| Fleece containing kemp (e.g., Welsh mules) | Carpet blend | Barry Bellis |
| Nice white fleece | Dyeable apparel (pink, green, blue) | Barry Bellis |
| Best fleeces | Formal wear | Barry Bellis |
| Lower grades | Slug pellets | BBC |
Bellis explained the sorting process: "If you've got a nice white fleece, you're able to dye it pink, green, blue, whatever colour you want. The blue face Leicester fleece, which is our closest to the merino, that will go into knitwear like men's suits." Wool from Welsh mules is more likely to be walked on than worn, he said: "This type of fleece, which contains kemp, that will tend to go into a carpet blend because of the colour."
Outlook: structural supply squeeze
The wool industry has survived centuries, with the versatile fibre being spun back in the Bronze Age, the BBC noted. While the rising cost may not be welcomed by shoppers seeking woolly socks and jumpers this winter, it does mean farmers are more likely to cover the cost of shearing. With fewer sheep in Wales, the UK and New Zealand, and the Covid-era carry-over of wool now cleared, the supply side remains tight — a backdrop that, according to British Wool's Gareth Jones, is the fundamental driver of the current price strength. For traders and procurement teams, the 70%-plus annual gain and the 10-year price high signal a market where supply constraints, rather than seasonal demand alone, are setting the floor under prices.
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