WOOL DISPOSAL

Press, Volume LXXXII, Issue 24865, 3 May 1946, Page 8

WOOL DISPOSAL

SELLING PROCEDURE EXPLAINED AUCTIONS AGAIN 7 THIS YEAR (P.A.) WELLINGTON. May 2. For the information of wool growers and others the Wool Disposal Commission has issued the following explanation of the selling procedure, and the working of the reserve price and contributory charge under the wool disposal plan as authorised in New Zealand by the Wool Disposal Act. 1945: “It is proposed that bulk purchase from the wool growers of New Zealand’s wool clip will terminate on June 30, 1946, and thereafter growers •will sell their own wool under the disposals plan, with the support of a reserve for ‘floor price’ placed on wool submitted by them for sale at auction. The disposals plan will be administered by the joint disposals organisation. which will comprise the four governments (United Kingdom, Australia. South Africa and New Zealand), in partnership. The relative t prices realised for different .types of wool at auction will reflect the valuations of the market but a general price level of wool will be made effective by the joint disposals organisation, which will •prescribe the minimum reserve prices at which it will be willing to take up any new-clip wool unsold at auction. “The four governments will each year agree on a general level of reserve prices to operate for the ensuing wool year. The joint disposals organisation will apply that general level of reserve prices to various types of wool and valuers of the New Zealand Wool Disposal Commission (the New Zealand subsidiary or agent of the joint disposals organisation) will, by appraisement, apply the type values to the various lots which will be submitted by individual growers for sale. These type values for each lot will be the reserve price. - Auctions After July 1 “After July 1, 1946, it is proposed that growers will offer their wool at auction. Sales may be made direct to manufacturers, or to wool dealers by growers who find this procedure convenient, but it will not be possible for the joint disposals organisation to ensure that growers who dispose of their wool otherwise than at auction will receive the protection of the reserve price.

“In terms of the disposals plan, the operating expenses of the joint disEosals organisation in the selling and andling of accumulated stocks and wool bought in at the reserve price will be borne equally between the growers and the joint disposals organisation itself. The growers’ halfshare will be found from the proceeds of the contributory charge on all sales of new-clip wool. This charge will be at a rate sufficient to cover growers’ half-share of the operating expenses, and will be inclusive of the levy or payment made by growers to the New Zealand Wool Board to cover its expenses in publicity, research, etc. Upon termination of the disposals plan the balance (if any) of the money received as a contributory charge will be applied for the benefit of the wool growing industry in such manner as. may be determined by the Minister of Marketing after consultation with the Wool Board. “The organisation’s half-share of the operating expenses will be met from the proceeds of the sale of wool bought in. “When the sale of wool by growers at auction is recommended, growers, as in pre-war times, will themselves be responsible for the payment to brokers of the usual selling charges. Accordingly growers will receive the proceeds of the sale of their wool, less brokers’ selling charges and the contributory charge under the disposals plan which, it is proposed, should commence from July 1. 1946. Reserve Price “The auction reserve price for each lot of growers’ wool will, in effect, take the place of the price at which the United Kingdom GoveTftffiteffr§lsT3 to overseas buyers under the wartime plan. The price to be received by growers under the disposals plan (that is, the sale price less brokers’ selling charges and the contributory charge) will take the place of the actual price paid to growers under the ■war-time plan. Thus the contributory charge under the disposals plan will take the place of the margin under the war-time plan between the price charged to overseas buyers ana the price paid to the growers. The margin ©r difference in each case covers the costs. The war-time margin was sufficient to cover costs and build up some reserve against the possibility of future losses on the selling of accumulated stocks. “The maintenance of present returns to growers depends on the market prices for wool, the operation of the reserve price, and the extent to which these prices can be maintained under the protection of the marketing plan. The success of the plan will depend not only on its securing orderly marketing. but also on the progress it is able to make in the gradual reduction of accumulated stocks.”