WOOL SELLING SCHEME

Press, Volume LXXXII, Issue 24983, 18 September 1946, Page 9

WOOL SELLING SCHEME

“ORGANISATION PROTECTS GROWERS”

The organisation in charge of-wool disposal this season is essentially a growers’ scheme, according to Pyne, Gould, Guinness Ltd.’s “Annual Review.” It exists to protect the grower at present and in the future. “United Kingdom-Dominion Wool Disposals, Ltd., is a large title, and we have no doubt that they will be more briefly referred to as ‘J.O.,’ ” the "Review” states. “The woolgrower will no doubt ask himself, ‘Who is “J. 0. and whosfc side is he on?’ Let it therefore be stated that fundamentally and basically the new scheme is a growers’ scheme to protect the growers’ present and future interests.. “Admittedly J.O. has taken over the responsibility for the stockpile which previously was the liability of the United Kingdom alone, but it is obviously in the interests Of present and future growers that this stockpile should be marketed in an orderly manner, and that is what J.O. proposes to do. ’*•* %

“The J.O. reserve price is designed both to protect the stockpile, and to ensure that certain sections of a new season’s wool are not sacrificed owing to a temporary lack of demand. The J.O. reserve price will not remain constant from season to season, because market values under open competition must ultimately play a large part in the determining of any reserve price, but, under the J.O. system, it is proposed that prices be on at least a seasonal basis, and it will therefore be possible to lift certain neglected wools temporarily off the market, which should help materially to eliminate the violent price fluctuations of the past. “It is proposed to work the J.O. scheme in New Zealand on the following lines:— “1. Prior to the auction taking place, each lot will be valued by J.O. appraisers and the reserve price given to the broker.

“2. J.O. is prepared to buy at its reserve price if this price is not bid by any other buyer. “3. The grower does not have to accept the J.O. reserve price, or any higher price which may be bid, unless he wants to, but (and these are important)— “(a) If the grower turns down the J.O. reserve price for any particular auction and then changes his mind after the sale and decides to accept, J.O. will not buy the wool as at that particular auction, but will insist that this wool be reoffered at a subsequent auction.

“(b) Such reoffering cannot take place until unoffered wools have had their turn at auction ‘,‘(c) J.O. will not alter its original reserve price when wool is reoffered unless deterioration has taken place, in which case the reserve price will be reduced.

“This basis seems to us to be quite fair, and as this scheme is essentially a growers’ scheme we feel certain that growers will support it and be content to make the J.O. reserve their reserve for all lines other than certain specialities which may be outside the J.O. range, and on the sale of which the grower will, as usual, be guided by his broker. It is needless to add that every lot will be valued by the broker and a close watch kent to see that J.O. valuations are correctly estimated, and that lines are protected to their market value when the market is more buoyant than the J.O. basis.”