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Last Updated: Wednesday, 20 August, 2003, 10:40 GMT 11:40 UK
Bradford's wool traders go electronic
By Brian Wheeler
BBC News Online business reporter

After centuries of traditional "open outcry" auctions, Bradford's wool merchants have gone electronic.

Bradford wool depot
Bradford is still the centre of the UK's wool industry
The British Wool Marketing Board (BWMB) has introduced a computerised auction system, based around that used by Dutch flower sellers.

The BWMB says it wants to cut costs and make the sale process more transparent.

But the transition has not been a painless one.

"There was a lot of scepticism and a lot of fear that it was going to change the structure of the industry," says Ian Hartley, the BWMB's managing director.

"It is a very traditional industry in some respects, and therefore we have had to take it slowly."

The BWMB was set up in 1950 as a non-profit making co-operative, aimed at getting the best price for the UK's thousands of sheep farmers.

The computer deadens it, it has no emotion
Michael Crossley
Wool merchant
It recently took control of the auctions from the London Committee of Wool Brokers.

It had originally planned to abandon the sale days at its Bradford headquarters altogether and have traders bidding against each other in cyberspace instead.

But that option was rejected by the merchants, who sell on the raw wool to carpet makers and other clients around the world.

"It is nice to be able to see who is bidding against you. That there is somebody there," one merchant told BBC News Online.

Hushed atmosphere

Bradford has been the centre of Britain's wool trade since the 19th century, when merchants would crowd into the city's cavernous wool exchange.

How British wool is turned from raw fleece into finished product

Their 21st century equivalents sit silently at computer screens, as a disembodied electronic voice calls out the lot numbers.

The atmosphere is hushed and studious, and about as far removed from a traditional auction as it is possible to imagine.

Michael Crossley, who has been in the trade for 54 years, misses the old days.

"If there was a big sale going on and the market was rising, the atmosphere was feverish.

"People were on their feet screaming and shouting and that just made the sale flow.

"It's difficult to know how you will re-create a similar atmosphere.

"The computer deadens it. It has no emotion."

Paying the rent

But he is in no doubt where the future lies.

Wool traders
Traders are adapting to the new technology
"With the electronic system you could sit at a terminal anywhere in the world and take part in the bidding," he says.

"In Ireland, they are selling to Italy, to Iran to Romania, just because they said the internet is for them."

Many of Britain's sheep farmers, who control the BWMB, are also keen to see the auctions thrown open to the world.

The farmers have no choice but to shear their sheep, for the health of the animal, even though the wool accounts for about 5% of its value.

In better times that would have raised enough cash to pay the average hill farmer's rent for the year.

Stale market

But although prices have recovered by about 20% in the past 12 months, times remain hard, with some farmers complaining the wool cheque hardly covers the cost of shearing.

A few farmers, with larger and better quality clips, have even started dealing direct with the wool merchants.

The UK is the world's fifth largest producer
About 70% of UK wool is used to make carpets
The BWMB registers any producer with four sheep or more
The number of registered producers has gone down by 8% in the past year, but still stands at 61,801
The 2002 clip was up 4.5% at 37.9m kg
2002 prices up from 68p to 80p per kg
The UK market is worth between 60m and 80m a year
Source: BWMB
David Smith, whose family farms Swaledale sheep in Northumberland, says the new electronic trading system could not have come soon enough.

"The market had become very stale. It needed something to give it a kick in the pants," he says.

"I applaud the traders who were very sceptical about electronic trading. They are now feeling more comfortable with it and that's a good thing."

But, like many others in the industry, he believes a move to online trading, with bidders joining from around the world, is the way to go.

But the BWMB is wary of such talk.

Net profits?

It has only just managed to convince the merchants to switch to electronic trading, following a closely fought vote in October.

Some had never used a PC before, let alone taken part in an online auction.

The next step, the board says, is to allow them to follow the progress of the auctions from their offices, without bidding.

But it is difficult to see how Britain's wool trade can remain within one room in Bradford for very much longer.

Elsewhere in Europe, wool producers take their chances on the open market, using the internet where necessary.

Small quantities of raw wool are even starting to crop up on the online auction site, eBay.

The writing is surely on the wall.

Australia enjoys wool boom
20 Feb 02  |  Business

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