Fresh hope for hill farmers

HARD-pressed hill farmers have been given a surprise New Year present - wool is back in fashion around the world, and prices are soaring.

In Australia, the capital of international wool trading, prices rose 7% last week on top of a 10% jump the week before. Britain's wool market in Bradford showed more modest increases, but it is still welcome news for sheep farmers left reeling from the effects foot-and-mouth disease and years of falling income.

Though most British wool ends up in carpets rather than clothing, higher prices for Australia's finer wool usually mean higher prices all round. David Conners, managing director of Woolmark, the international marketing organisation, said: 'Wool is a great fibre and people always come back to it. We now have a rational marketplace and can look forward to some good years.'

British hill farming is dominated by sheep-rearing and incomes have been sliding in recent years. Net hill farm income dropped from £3,720 in 1999 to £2,375, even before last year's foot-and-mouth disaster.

On paper, a 20% rise in the open market wool price should mean an immediate increase of just under £1 on the cost of a £30 sweater, with larger increases on more expensive, designer items.

But Conners said: 'Woollen clothing should not start to rise in price, with the exception of all-wool men's suits, which may see some increase. Manufacturers and retailers are more likely either to absorb the extra cost or to turn to substitute materials and to fibres that can be blended with wool.'

With wool accounting for just three% of the fibres in all the world's clothing, the competitive position is tough and prices can't rise too far or too fast. British annual wool production of 222,000 bales is dwarfed by Australia's 3.3 million bales (one bale equals 180 kilograms.)

But John Liddle, editor of Britain's long-established Wool Record periodical, said: 'We have suddenly reached the position where demand is outstripping supply. There will be a shortage of wool. For the past couple of years, for British farmers, wool prices have barely covered the cost of shearing the sheep. Now prices will go up.'