In competitive markets, British Wool declares depot closures

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Through Claire Taylor

As part of a major cost-cutting exercise, BRITISH Wool has announced major improvements to its sorting network, with plans to close four of its 12 depots.

Although the 11 million kg of unsold wool it had at the end of April has been reduced by British Wool, the company stressed that the demand remains “extremely difficult.”

In order to ensure that no extra transport costs are incurred, wool producers have been told that where sorting depots are closed, they will be replaced by a new intermediate depot nearby.

“British Wool has managed to sell wool in decent quantities since August, which has allowed us to clear unsold stock from last season, but prices are still severely depressed. The global market is facing an oversupply of crossbred wool, mainly from New Zealand, but also from other European markets. Although we have seen some more positive signs in recent auctions for some wools, carpet wools continue to be under a lot of pressure.”British Wool has been able to sell wool in decent quantities since August, which has allowed us to clear last season’s unsold stock, but prices are still severely depressed. The global market is facing an over-supply of crossbred wool, mainly from New Zealand, but also from other European markets.

Owing to the shutdown of the hospitality industry, the demand for contract carpets servicing hotels, offices, movie theaters, restaurants, airports and cruise ships remains highly depressed.

“In order for us to maximize the value of the producers’ wool, it is critical that we reshape the business in accordance with current market conditions,” Hogley added. “Next season, we will reduce the number of grading depots we operate from 12 to eight. This will result in the closure of our grading depots in Irvine, Porthmadog, Stamford and Liskeard and wool from these areas will be reallocated to other grading depots within our network.”

See Friday’s edition of The Scottish Farmer for comprehensive news and views on Scottish agriculture or visit www.thescottishfarmer.co.uk

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