Prof. Philpott Defends Wool Price Forecast

Press, Volume CIII, Issue 30442, 16 May 1964, Page 14

Prof. Philpott Defends Wool Price Forecast

A defence of a forecast he made last December about the course of the wool market in the 1963-64 season which aroused widespread comment, even overseas, was made at the annual conference of the South Island Wool Association yesterday by Professor B. P. Philpott, professor of agricultural economics at Lincoln College.

“My comments caused a terrific hullabaloo all round the country the reasons for which I have never really been able to understand,” he said.

“The tenor of my remarks was that prices, which were then running at about 60d, would decline, fairly early in 1964 I thought, but at any rate sooner .or later in the season, and that the season’s average would be much lower than the then current 60d—in fact I said I thought it would be about 55d per lb. “Well prices have been easing fairly continuously

since about the beginning ofi March and are now about 7d. i per lb below the early Dec- 1 ember peak. To date the s average for the clip is about ; 56d and I would expect us s to finish up with 55d for the < whole season as forecast.” i Market Forces Professor Philpott said that ] he saw no reason to amend ‘ the analysis of market forces : which he had given last Dec- 1 ember. The factors involved were a small fall in world ! wool supplies in the current season compared with 1962- ’ 63; a very low level of trade ■ stocks of wool, possibly indi- ' eating that mills had been ‘ consuming wool in recent * years much faster than the 1

rate of raw wool production—recent calculations showed that the ratio of stocks to consumption was lower than at any time since the boom season of 1956-57; a rise in mill consumption of wool and more important, now that figures were available, was the fact there had been a sharp rise in consumer income and spending on clothing in Europe and Japan. “Some of these factors I thought and said in December would be temporary, and this has turned out to be the case. The boom in textile sales could not lead to any further rise in raw wool consumption due to the tight wool supply position, and what has happened instead is a sharp upward movement in the ratio of non-wool to wool fibre usage—from 65 per cent in 1962 to 70 per cent in the last quarter of 1963.

"Most Unfortunate” “This is most unfortunate and it would have been far better if there had been ample supplies of wool, even if at lower prices, to prevent synthetic substitution occurring.”

Professor Philpott said that another temporary factor, as he had suggested, had been the consumer boom in Europe, which had inevitably led to government anti-inflation-ary policies in Italy, France and Britain.