Sheep farmers selling their wool through the British Wool Marketing Board are due to benefit from a further 22p per kilo rise in wool payments this year.
The increase, the fourth in consecutive years, comes on the back of strong worldwide demand, notably in the emerging economy of China, explained BWMB chief executive Ian Hartley.
Addressing a meeting of BWMB regional committee members, Mr Hartley said: "The increased payments have come as a result of the competitive auction system used by the BWMB to trade all the wool it sells. The average clip value this year will be £1.24 per kilo, representing a significantly increased return for producers. This will be a welcome boost to farm incomes, particularly as lamb values have been hit in recent weeks by the shift in the exchange rate."
BWMB board member Trevor Richards said there had been an increase in production in 2011, with volume up by six per cent across the country.
"This bodes well for the wool market as demand is still strong from across the world and sheep populations have fallen in the major wool producing nations in recent years," he explained.
Brian Dallyn, the board's member for the South West, said: "Farmers should recognise that it is the BWMB's unique involvement at all levels of the supply chain which, together with its competitive auction system, puts it in such a strong position to be able to help the UK sheep industry extract the maximum value for its wool."
The BWMB collects, grades and markets wool for all UK sheep farmers, and provides a high quality service to all producers regardless of the type or amount of wool produced. "We're here for everybody and it's our collective marketing which helps British farmers get the best price possible for their wool," added Mr Dallyn.
Mr Hartley said the BWMB was working hard to ensure British wool was well promoted across the globe with much of this work being done in tandem with the Campaign for Wool, of which BWMB is a founding partner.
"Although the overall economic outlook is not as positive, we hope to see prices maintained for the 2012 season," he said.
"The Campaign for Wool continues to go from strength to strength and in 2012 is entering new territory with major campaigns in China, France and the USA.
"This year will also see Campaign for Wool support the Queen's Jubilee celebrations as well as building on the work done in both 2010 and 2011."
Mr Hartley said overall the BWMB was in a good position and once again producers were due to see their income increase.
He added: "We are confident of another good year."