Farmers Benefit from a Record Increase in Wool Prices

icelandic sheep

The board of Ístex has decided to raise the price at which it purchases wool from farmers by an average of over 48% for all processing categories. This is the biggest increase in wool prices in the last 15 years, Bændablaðið reports.

80% Farmer-Owned

Ístex was founded in 1991 to “carry on the Icelandic wool industry that started in Mosfellsbær in 1896,” as noted on the company’s website. Ístex buys directly from farmers and processes about 99% of all Icelandic wool. Icelandic farmers own 80% of the company.

Yesterday, the board of Ístex announced that it had decided to raise the price at which it buys wool from farmers by an average of over 48% for all processing categories. Bændablaðið interviewed Ístex CEO Sigurður Sævar Gunnarsson, who stated that the increase varied between categories of wool, with a greater increase in more highly-rated classes. This is the biggest increase in wool prices in the last 15 years.

“One of the reasons for these price increases is the good performance of Ístex in the first months of the year and, indeed, in the last quarters. We had a very difficult 18 months starting in the summer of 2019 with a relatively rapid decline in the sale of wool blankets, in addition to low wool prices, generally.”

Sigurður explained that the operational wheels “started to turn again” when Ístex added an evening shift to its knitting-yarn production in Mosfellsbær in the fall of 2021. Greater efficiency was achieved in terms of the equipment and sizes, together with the fact that prices rose. “So, the last two years have been quite busy for our people but, at the same time, rather rewarding,” Sigurður remarked.

As noted in the article, sales in the first six months of the year are approximately ISK 200 million ($1.5 million / €1.3 million) higher compared to the same period last year.

“Better prices than expected have been achieved for certain categories of wool … the prospects this year, therefore, look good, but on the other hand, we may be just one more serious malfunction from a difficult year,” the article quotes Sigurður as saying, who added that the favourable exchange in Iceland is contrary to the situation abroad, “where prices for raw wool are still low and have not fully recovered.”

Accommodating farmers

Other factors also affected the board’s decision to raise prices for farmers, according to Sigurður. “It felt right to accommodate farmers due to delays in the collection of wool in many parts of the country.”

“We’ve suffered serious malfunctions in our machinery, which delayed our washing process by more than a month. This meant that we were unable to receive more wool during the repairs. All equipment is now in order, and we are working hard to get all the wool to Blönduós as soon as possible. We at Ístex would like to thank farmers for their patience and apologise for the inconvenience caused during this difficult period.”

Sigurður observed that the proper categorisation of wool by farmers was key to increasing the value of wool. Over the years, most farmers had taken great pride in improving the quality of their wool, and those who had taken such steps were being better supported, compared, perhaps, to those who could stand to do even better.

Sigurður concluded by stating that Ístex’s biggest investment this year was a new spinning machine that was slated to arrive in the fall. “It’s being built in Italy and will suit the Icelandic wool very well.”

Record Sales of Icelandic Yarn in 2021

wool yarn

Sales of knitting yarn grew by 50% last year at Ístex, the company that processes about 99% of all Icelandic wool. Ístex is considering introducing night shifts at their factory to increase production. The company’s CEO hopes to invest more in the company in order to reach bigger markets in Asia, the United States, and Russia.

The year 2021 was a record year for Ístex both in revenue and profit, Viðskiptablaðið reports. The company’s revenue grew by 44% between years, to ISK 1.2 billion [$9.7 million, €8.5 million] last year. The company made a profit of ISK 93.4 million [$751,000, €661,000] last year, especially impressive compared to the year 2020, when Ístex reported losses of ISK 67.5 million [$543,000, €477,000]. In 2021, the company saw a 50% rise in sales of lopi knitting yarn.

Read More: Icelandic Wool Export Up 70% in Pandemic

Ístex CEO Sigurður Sævar Gunnarsson says last year’s sales of knitting yarn are likely a historical record for Iceland. More people have taken up their knitting needles in the pandemic, which has led to increased sales both in Iceland and abroad. “We expect continued demand despite the fact that the effects of the COVID pandemic are decreasing. In this light we can mention that after the banking collapse of 2008 there was a big increase in hand knitting, especially in Iceland, that really never decreased.”

Ístex has introduced evening shifts to its factory, but is still not managing to meet demand. The company is now considering introducing night shifts as well. Sigurður would like to see increased investment in the company so that it can pursue larger markets. “There are certain opportunities fr us now and we have to fish for them. There are certain markets where we haven’t been able to gain ground.” He particularly mentions the United States and Asia, though Russia is another market that is likely to grow quickly.

Icelandic Wool Export Up 70% in Pandemic

Since the COVID-19 pandemic began, Icelandic lopi wool export has shot up by 70%, RÚV reports. Lopi is the yarn used to make Icelandic traditional sweaters, or lopapeysur, and is known for being both warm and waterproof. While several European countries have been importing Icelandic wool in larger quantities, it seems that knitters are picking up their needles in Iceland as well.

It’s not surprising that the pastime of knitting has grown in popularity this year, thanks to social restrictions and lockdowns imposed due to the pandemic. Yet an increase of 70% is quite a rise for Iceland’s main wool processer. “We are almost sending out one or two forty-feet containers of hand-knitting yarn per week,” says Sigurður Sævar Gunnarsson, director of Ístex, which processes about 99% of all Icelandic wool.

In order to meet demand, Ístex has hired more workers to cover evening shifts. The company hopes to increase production by 100 tonnes by next year. While Icelanders, Germans, Swedes, and Norwegians have all shown an increased appetite for Icelandic wool and knitting patterns, Finnish knitters have shown a particular enthusiasm.

Sigurður says Ístex has been receiving calls from lopapeysa knitters who can’t find a particular colour when it has been sold out in shops.

Producing a Softer Version of Icelandic Wool

For some years, the Varma and Ístex knitting and sewing factory has been working on a development project intended to produce a softer version of Icelandic wool. “It’s a known fact that the Icelandic wool stings,” Páll Kr. Pálsson, CEO and owner of Varma, told RÚV. “But I started thinking there’s something more we can do about it and make the Icelandic wool softer and more wearable.”

Read more on Icelandic wool from Iceland Review

Ístex buys wool from farmers, including lamb’s wool. “The farmers keep the lambswool separate, and the washing station verifies it – and this project uses more lambswool to increase the softness of the thread,” says Ístex quality- and development manager Sunna Jökulsdóttir. Lambswool is the first fleece sheared off sheep in the autumn and is softer than the wool of older sheep.

The production process was also rethought entirely, from the way the farmers shear the wool to how it’s processed within Varma, to produce an even softer thread. Páll says the wool yarn they’re now making is competitive with some types of foreign merino wool. He won’t say it rivals the very finest foreign merino, but Varma will be eliminating imported wool in many of their products in favour of they’re new lambswool yarn. He adds, however, that when they get down to it, the most important thing is what designers choose to do with the wool they produce, that’s where the opportunities lie.

Read more on Icelandic wool production and design from Iceland Review


Men of the Cloth

Steps above the crowded Laugavegur street, the workshop of Kormákur and Skjöldur Men’s Boutique provides a cushy haven: hefty rolls of fabric rise in piles, and fine suit jackets in various stages of completion line the walls. Sounds are dampened, but there’s plenty to see – and touch. In the middle of the room, tailors Birna Sigurjónsdóttir and Rakel Ýr Leifsdóttir share a high table. They’re making a bespoke suit for artist Ragnar Kjartansson.

Herrafataverzlun Kormáks og Skjaldar, as it is known in Icelandic, has only been dressing men in Iceland since 1996, but their timeless selection of menswear suggests a much longer tradition. Pick up any one item – a wool suit, a Barbour jacket, or a plaid accessory (there is no shortage of plaid on offer) – and the first adjective that comes to mind is “classic.” Yet the suit lying on the table in this workshop is the first fruit of a remarkably innovative project – a quest to make high-quality tweed out of Icelandic wool.

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The Colourful Oddyssey of Icelandic Wool Dyeing

Wool dyeing Iceland

Following the winding outskirts of Reykjavík, a gravel road jostles you toward a wooden hut. The strong scent of herbs emanates from the doorway. Before you can enter into the warm space, Tryggur, a charmingly fluffy Labrador-collie mix, sidles up to you in shy greeting. He leads you in and sits down patiently amongst a colourful collection of yarns, waiting for a pat while his owner talks over the sound of gently bubbling pots.

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Request Protected Status for Hand-Knitted Icelandic Sweaters

lopapeysa Icelandic sweater

A group of Icelandic sweater producers hopes to legally protect the product name “Icelandic sweater” (Icelandic: íslensk lopapeysa). The Icelandic Food and Veterinary Authority has received a request from a group of traditional lopapeysa manufacturers to protect the term with a designation of origin. This means that sweaters with the traditional decorative pattern could only be labelled “Icelandic sweater” if they are knitted by hand in Iceland using Icelandic wool.

Designation of origin

In December 2014, the Icelandic parliament enacted the Product Names Protection Act, which allows for the protection of product names on the basis of origin, territory, or traditional uniqueness. Such laws, often manifested as Designation of Origin, are widespread in Europe, where they are often applied to artisanal products such as French cheese and Spanish ham. The first product name to receive such protection in Iceland was “Icelandic lamb,” which was protected last year.

The proposal suggest that an increased demand for Icelandic sweaters has led to widespread production of the traditional design with its decorative collar. “Increased foreign production of ‘lopapeysa’ sweaters made of foreign wool or synthetics also makes it urgent that buyers have the possibility to differentiate between ‘Icelandic sweaters’ and imitations,” states the proposal. Any opponents of the proposal are invited to submit comments by email via [email protected] by June 29, 2019.


icelandic sheep

As national symbols go, the sheep isn’t the flashiest of them all. In fact, most tourists prefer the cute and cuddly puffin to adorn their commemorative key chains and fridge magnets rather than the trusty sheep. Throughout history, however, the animal that has earned the love and respect of Icelanders is the sheep. It enjoys high cultural status, not just as a staple in the traditional Icelandic diet, but also for keeping locals warm.

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Icelandic Sweater Patterns Sell Like Hotcakes

Online sales of knitting patterns for traditional Icelandic sweaters are growing by about 25% per year RÚV reports. The traditional Icelandic sweater, known as a lopapeysa, is a popular souvenir for tourists visiting Iceland. Now more and more of its fans are opting to knit their own.

Lopapeysur (the plural of lopapeysa) are made of unspun Icelandic wool and are characterised by a yoke design – a wide, decorative pattern around the neck opening. The design originated in the early or mid 20th century and has since become a symbol of Icelandic national identity. “Icelandic wool forgives everything, you don’t even have to be good at knitting, it hides all mistakes,” says lopapeysa designer Védís Jónsdóttir.

Nearly one quarter of lopapeysa patterns sold online go to the US market, though they are also popular in Germany and the Nordic countries. Ístex in Mossfellsbær, Southwest Iceland, buys 99% of all Icelandic wool, or about 1,000 tonnes per year. Sales of the product have increased by 120% over the last 10 years. “Right after the crash there was a sharp increase in wool sales,” says Sigurður Sævar Gunnarsson, Ístex’s CEO. “This increase continued until 2014, 2015, when the currency started to drop. But there is still considerable growth in certain areas like the Nordic countries, in Germany, and in the United States.”

Védís says there are many reasons for the sweaters’ continued growth in popularity. “It’s a very flattering shape and it’s very fun to knit them because they are seamless,” she states, adding that consumers’ growing desire for natural, sustainable materials is also contributing to the lopapeysa pattern sales. “This is a natural material. It isn’t plastic.”