The Wool Prices

Press, Volume LXXV, Issue 22893, 14 December 1939, Page 8

The Wool Prices

Prices received for Canterbury wools at the first appraisal under the war-time scheme of disposal, while not generous, will be satisfactory to growers. They should allow farmers to carry on without loss, though they certainly will not permit excessive profits to be made. The average" price agreed upon between the Imperial Government and the Government of New Zealand is the highest, with one exception, in any season since 1928-29, In that season it was 14.88 d per lb for wool sold at auction, and in the 1936-37 season, when prices rose steeply, it was 15.71 d per lb. The official range of prices printed on Tuesday will give growers an indication of what they may expect for the rest of the season. Quite the most encouraging aspect of the prices paid is that the finer wools have been brought into a sounder relationship with other wools. seasons now, coarse wools have been filling the buyers’ eyes, and the premium for fine wools has been reduced to such an extent that it has for many types disappeared. Merino wools, which form a considerable and important part of the wool clip of Canterbury, have had a particularly bad time, and the position of many run-holders on the higher country has become desperate. The schedule to which the appraisers are operating has in large measure restored the premium on fine wools and has to that extent averted from much of the high country of Canterbury and Otago the very real threat of its going out of production. On country which will produce •nothing but wool, and there is much of ft in the South Island, the loss of the premium on fine, wools means that farming must be carried on at a loss. Fine wools this year - will receive the full benefit of the increased average price; and though coarser types will not receive the same lift, where coarse wools are produced there is in general the additional income to be had from fattening, which this season will be quite attractive. Apart from the average price, the schedule appears to have been soundly' constructed. It is also apparent that the valuing is being done with an eye to the needs of the normal markets for New Zealand wool. It was never at any time expected that the United Kingdom could absorb all the wool offering from Australia and . New Zealand, tiiough. *th.e needs of tire United. Kingdom will undoubtedly be bigger than normal; and in both the New Zealand and Australian agreements provision is made for the sharing of any profit that may accrue from the sale by the British Government of Dominion wool to neutral or other countries. It seems certain that the Continent, with the exception of Germany, which has been a restricted purchaser for some years, will want approximately the normal quantity of wool, and there is the prospect of a big trade with the United States, where at present a real hunger for wool has been developed by the unusually active demand for textiles. The Imperial authorities are urging the full maintenance and where possible the increase of export trade

with foreign countries, and any wool surplus will be useful accordingly. Britain will undoubtedly need all the foreign credits that can be acquired, particularly in the United States, where a heavy programme of armaments purchases will have to be financed. A point of some interest is that 5 per cent, of the gross amount of account sales is to be retained in New Zealand to form a fund which will be used at the end of the season to equalise the realisation for m the whole New Zealand clip, if that is found necessary. It is, of course, even with the most careful calculation, impossible to ensure that the appraisers’ valuations will amount at the end of the season to' exactly the price agreed on with the Imperial Government. In Australia the amount retained is 10 per cent.