The country's wool industry is still counting the cost of the foot and mouth disease and September 11, according to the British Wool Marketing Board.

The organisation says it has had to reduce staff levels and re-organise its operation due to the market downturn.

The Board, which is based on Roydsdale Way, Bradford, says the cost of this re-organisation has been £806,000.

But Frank Langrish, Board chairman, believes some progress has been made in achieving its objectives.

The BWMB stepped up its long-term investment programme and pushed forward a number of projects.

A 60,000 sq ft grading depot was opened in Carlisle and trials of a new electronic auction system have begun, both of which aim to reduce costs.

The Board is also looking at new products and markets and is set to open a testing house with the textiles industry.

Mr Langrish said: "Sales of new season's wool are good, sheep numbers throughout the world are at a low level and , at long last, southern hemisphere countries have strengthening currencies against sterling and the euro and their wools are less competitive with ours."