WOOL RESERVE PRICE FOR SOUTH AFRICA

Press, Volume XCI, Issue 27670, 28 May 1955, Page 5

WOOL RESERVE PRICE FOR SOUTH AFRICA

South African woolgrowers have decided that while Merino prices, though lower, are still satisfactory, the time is most opportune to establish a wool market stabilisation fund. Though the probability of a sharp slump in prices is at present remote, they believe the traditional vagaries of the market are a reminder that it cdn happen again. The South African growers, with £6,000,000 sterling of the J.O. profits to their credit, have resolved to supplement it to £8,000,000

by levies of up to one-halfpenny per lb per annum, and to set up a stabilisation plan on the New Zealand pattern. At the beginning of each season a reserve price will be fixed, at which the South African Wool Commission will buy-in wool that does not realise the price specified, and to re-offer it when the market is more favourable. Since the New Zealand growers established a similar plan after J.O. went out of existence, it has been necessary to purchase only 1600 bales in 1952, and these were resold a few months later at a profit. It will be recalled that Australian growers rejected by referendum a plan to set up a joint stabilisation scheme covering the three Dominions with proposed funds of £66,000,000. The South s Africans intend to urge reconsideration by Australian growers, realising that without Australian participation the scheme would be inadequate to provide a buffer against a Merino slump. The bill is now before the Union Parliament.