Irish wool prices have fallen by approximately 30% since the beginning of June, according to Vincent Pierce from the Wicklow-based Laurence Pierce of Wool Merchants Ltd.

We were offering producers €1.10/kg at the beginning of the 2016 season: today the figure is 80c, he said.

“We could be looking at prices falling to around 70c over the coming weeks. Approximately 5% of Irish sheep producers winter clip their sheep.

“It is normally of an exceptionally high quality. For the most part, this is reflected in a higher price: but not this year.”

The Pierce company buys 4.5m kilos of wool directly from farmers annually. Of this total, 1.5m kilos are purchased in the UK with the rest procured in Ireland. The vast bulk of this wool is sold to China.

Pierce said that it is China where the problem lies.

We forward sold 30% of the 2016 wool crops to China for the equivalent of US$3/kg back in the early spring.

“But it subsequently transpired that a number of these customers reneged on the deals entered into. We were then left with no option but to find new customers for this wool.

“That came at a cost. Yes, we were able to get new deals secured with Chinese buyers but the price on-offer was $2 not 3$.

“Due to storage constraints, we had to sell at the reduced price, which has resulted in big losses being notched up by this business.”

Pierce said that his company will commit to forward selling again in 2017.

“But it’s too early to predict the state of the market next spring. The core problem is the poor international price on offer to Chinese companies for the woollen goods they are bringing to market at the present time.

“It is also significant that prices paid at the British Wool Board auctions have fallen significantly over recent months.”

Pierce also confirmed that a significant proportion of the 2016 wool crop in the UK and Ireland had a distinct yellow taint.

“Nobody is sure why this issue raised its head. But it has been another factor in bringing down the prices available for wool,” he said.