WOOL SALES IN NEW ZEALAND

Press, Volume LXXXVIII, Issue 26857, 9 October 1952, Page 8

WOOL SALES IN NEW ZEALAND

Extension Of Season Advocated VIEW OF BRITISH INDUSTRIALIST (New Zealand Press Association) WELLINGTON, October 8. The New Zealand wool selling season should be extended by two to three months, says Mr J. H. Shaw, president of the British Wool Federation. Bradford, in a letter to Mr D. L. M. Martin, secretary of the meat and wool section council of Federated Farmers. In a statement to the press today, Mr Martin said: “Ever since wool auctions were resumed after the Second World War, have been concerned whether the 7 practice of selling the buik of our clip at auctions in New Zealand over the six-month period—November to April inclusive —is in the best interests of the growers. “In an endeavour to obtain an opinion from an overseas authority, I recently asked Mr Shaw, whose organisation represents wool manufacturing firms in the United Kingdom, for his views on this question. “In his reply, Mr Shaw says that, though there is a real community of interest on this matter between the grower and the user, this community of interest does not extend to all who

are concerned with the auctions. To the speculatively minded the short season, with the resultant strains on the finances of users, gives opportunities which would certainly be reduced if the offerings were spread over a longer period. “Instability” in Market

“Remarking that events last season illustrated that the present methods in New Zealand make for instability in the market, Mr Shaw stated: The heavy weights (approximately 470,000 bales) offered in New Zealand in the first three months of the year came close to swamping the market, and depressed prices very considerably. Had it not been for the appreciable amount bought by us for the United Kingdom Government wool stockpile, the position would have been much worse.

“The strain on the finances of those firms who decided that they must have the wool to see them through the close seaspn—May to October inclusive—was considerable,’ Mr Shaw said. ‘Towards the end of the season and for some considerable time after, when available supplies were scarce and the bulk of wool had left growers’ hands, the price level moved up considerably, and but for the fortuitous easing of restrictions in South America many firms here would have been in a difficult supply position. “ ‘The net result of all this was depressed prices for growers, when the bulk of the wool was being offered, and acute financial strain and difficulties over supplies and prices during the close season for users. Manufacturers’ Difficulties

“ ‘We believe that in the future this problem is going to be much more serious than it has been in the past,’ Mr Shaw said. ‘Compared with prewar, there are two most important factors of difference: while we have had world inflation, and wool prices even now are several times what they were pre-war. we have had no corresponding increase in firms’ capital and re-

serves, nor will firms be able to match their financial requirements with their financial resources so long as taxation in the United Kingdom stays at the present high rates; and whereas the United Kingdom used to draw on South America for substantial supplies, the United States now takes a considerably increased quantity of South American wools compared with pre-war days.’ “Mr Shaw says there is no seasonal manufacturing programme tied up with the availability of specialty wools,”. Mr Martin said. “Users of specialty wools have to make their products all the year round. The danger of manufacturers finding substitutes is very much greater under present conditions, as the manufacturer has no steady supply from New Zealand. This danger would automatically decrease if the supply position at the Dominion’s end were evened out. “Giving the topmaker’s view, Mr Shaw says: ‘The annpal headache of deciding in the early months of the year his policy to see him through to the next season is not a thing he enjoys. It is forced upon him by present circumstances, and far from objecting to having to space out his purchases, it is precisely what he would wish to have an opportunity of doing.’ London System Cited “Concerning the availability of light in New Zealand for inspecting and, valuing wool, Mr Shaw says that wool is sold in London throughout the year, and this difficulty, although encountered occasionally, is not serious,” said Mr Martin. “He says: ‘As representing the large users of New Zealand wool, I must say categorically that it is not in the least necessary for buyers to spend five months abroad between seasons. The interval between Australian seasons is two months. This is ample time for buyers to visit their overseas clients.’ “Mr Shaw concludes: Those who have the real stake in wool consumption and, I would hope, in wool production, are very much in the mood to make some progress towards better marketing of New Zealand wool. If no progress is made, we are simply asking for achieving a greater measure of stability, which could well be achieved by our own efforts. “ ‘ln expressing these views, I am speaking not only for the British trade, but also for the consuming countries of Europe generally, as you will remember that the International Wool Textile Organisation was unanimous in adopting the resolution that an endeavour should be made to bring about an extension of the wool selling season in New Zealand by a period of two to three months.’ ”