THE 2005 wool cheque will pay about 54p/kg, a similar value to last year, according to the British Wool Marketing Board's price schedule, just published.

Britain is now the fifth-largest source of traded wool and, although auction clearances have been generally good, volatile currency movements, particularly the strength of sterling against the US dollar over the last year, have held back any price increase.

Since 2003, the price indicator has increased 20pc in sterling terms but 50pc in US dollar terms. Countries such as China trade wool in the dollar, with the direct effect of pushing up the cost to them of both British wool and competitive New Zealand types, and keeping our price down in sterling terms.

With little sign of any strengthening of the dollar, keeping costs down, adding value to the clip and adapting to changing markets are high priorities for the board in the year ahead.

While there is limited scope for change if an efficient producer service is to be maintained, some adjustments have been made in the depot structure for this year. These have been based on a producer survey which indicated that there would be little change in the size of the UK clip except in Wales, where a 10pc reduction was anticipated.

Wool collection has therefore been re-organised in North Wales and the Newtown depot, already one of the largest sites in the UK, is being extended to accommodate an increased intake.

Two automated Belgian packing machines, especially designed for wool pressing, are being installed at this site to investigate more efficient ways of handling wool in the depot. A number of schemes for handling and packing wool on farm are also being considered.

Most sectors of the UK wool textile industry are experiencing difficulties as manufacturers struggle to compete with overseas companies with lower overheads. There have been a disturbing number of closures since the start of 2005 and, although the wool board is firmly committed to working with the home-based industry, there is increasing pressure to build closer relations with established overseas markets and seek new opportunities.

In a new departure, the wool board is sending all producers a newsletter alongside the price schedule, in a bid to convey some of its marketing activities and the range of products using British wool.

Managing director Ian Hartley, says the idea of the newsletter was generated by producers who, having visited BWMB headquarters admitted to being surprised at the scope of its operation. It is hoped to make it an annual publication